SUSTAINING an earlier position of mobile-phone firms, the chairman of the House ways and means committee said on Tuesday the 5-centavo regulatory fee proposed to be imposed on industry players is a tax and not a form of a fee, virtually junking a House resolution seeking the “broad spectrum fee.”
And since this is a form of taxation, Lakas Rep. Exequiel Javier of Antique said Congress will have to pass a law and not just relegate to the National Telecommunications Commission (NTC) the task of imposing the fee, as embodied in House Resolution 282, authored by Kabalikat ng Malayang Pilipino (Kampi) Rep. Danilo Suarez of Quezon.
Javier issued his observation at Tuesday’s deliberations on Suarez’s resolution, where he compared the revenues of mobile-phone firms with the projected income that will be generated if the proposed regulatory fee were implemented.
Answering the query of Javier, Lourdes Recente of the finance department said that total income tax of telecommunications companies for 2008 is P34 billion; while the total value-added tax (VAT) is P11 billion or a total of P45 billion.
“It will be higher than the income tax. It will be higher than the VAT and you call it a fee? That’s not a fee, that’s a tax. Congress must act on it to pass a law not through NTC. That’s a too much for a fee,” Javier said.
Prior to this, Globe Telecom’s chief legal adviser Rodolfo Salalima told the panel the Suarez resolution creates an obligation to telcos to submit themselves to metering.
He said that under Article 1157 of the Civil Code, obligations “arise from law, by contracts, by quasi contracts.”
“[Therefore] I am of the position that a resolution merely expresses the intent, the sentiment of the House under [Article] 1157. With due respect, a resolution cannot create an obligation on the part of the telcos,” Salalima said.
He said that in using the fee to fund the metering and computerize all public schools nationwide as stated in the resolution, the government will in effect tax all telcos 5 centavos per text.
“This tax is uncleverly disguised as a fee. The tax, no matter what you call it, is a tax and this tax is in fact confirmed by committee report of Congressman Suarez. We need a tax law, a tax law which must originate from the House, a tax law which must also be approved by the Senate,” Salalima said.
He also informed the panel that if the metering device are outside the control of the telcos, their vulnerability to wiretapping is further enhanced. Salalima said that at present, mobile-phone firms are encountering a problem on trying to avoid wiretapping by installing a number of firewalls.
He also said that on the part of Globe, it is ready to open its books for accounting, referring to an earlier threat of Suarez.
Suarez also told Salalima not to deceive the public by claiming that the telcos are giving away free text, as even what is called free text actually has a price.
In the same hearing, Gerardo Florendo, Revenue District Officer of the Bureau of Internal Revenue (BIR), admitted that the agency cannot monitor the real income of mobile-phone firms, especially now that electronic load or “e-load” is now the “bulk of the business of the telcos” because this transaction has no receipt.
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