IMF chief's text tax proposal draws flak


Posted at Nov 19 2012 11:59 PM | Updated as of Nov 20 2012 07:09 PM

MANILA, Philippines - Lawmakers on Monday criticized International Monetary Fund (IMF) managing director Christine Lagarde for proposing a tax on text messaging in the Philippines.

Senator Francis "Chiz" Escudero, in a press statement, accused Lagarde of "foreign meddling."

"It is not for any institutions or any foreign entities for that matter to dictate upon us what to and what not to tax. IMF and its chief has no business in even suggesting that we impose tax on text," he said.

"The power to tax is inherent in Congress and any external intervention is already meddling with our sovereignty," Escudero added.

Lagarde, during her visit to the Philippines last week, suggested taxes or levies on mobile phone services such as text messaging to boost government revenues.

"I was actually told this morning by the Vice President [Jejomar Binay] that the text coverage, if you will, or the telephone coverage, was way in excess of a hundred percent. It was in the range of 112% which clearly satisfies one of the two criteria for what we call a good taxation," she said.

Escudero described IMF chief proposal as "skewed."

"Ms. Lagarde is better off making suggestions to her fellow Europeans who can perhaps learn a thing or two from us," he said.

He believes that taxation should be based on the ability of taxpayers to pay. "Instead of providing relief for the Filipino public, this twisted idea of taxing text is an additional burden to the masses".

Escudero said he will block the proposal if it is raised in the Senate.

Kabataan party-list Rep. Raymond Palatino echoed Escudero's statement Monday.

"The text tax proposal has long been buried in the deep confines of Congress, mainly due to the broad opposition of Filipinos to the said legislation," he said.

He warned that the lower House leadership may revive the text tax bill.

Two congressmen in 2009 raised a proposal to tax text messaging. The measure was not approved amid opposition from the public and telecommunications companies.

"We have said this before and we'll repeat it in case the current administration does not remember: imposing additional taxes on text messaging and mobile phone calls would translate to additional burden for ordinary Filipinos," Palatino said.