Philippine lawmakers delay decision on tax on text

MANILA, Sept 22 - Philippine lawmakers in the lower house of Congress agreed on Tuesday to delay debate on a proposal to impose new taxes on text messages that would raise revenues to help to narrow the budget gap this year.

The lawmakers also agreed to hold more public hearings on the proposal to impose a 5 centavo tax on every text message sent through mobile phones due to strong consumer reactions, said Exequiel Javier, head of the lower house's ways and means panel.

"We need to conduct more consultations and, probably, further studies on the potential impact of the tax on text messages," Javier told reporters, adding the proposed tax bill was sent back to his panel for more deliberations.

The Philippines is often considered the world's text messaging capital because the country's 70 million mobile phone subscribers send an average of 10-12 text messages every day, according to government estimates.

Two weeks ago, Javier's panel approved the proposed tax on text messages to raise 36 billion pesos ($755.9 million) after lawmakers were reluctant to pass a proposal to increase excise tax on alcohol and tobacco products.

The so-called "sin" taxes were seen likely to bring in an extra 35 billion pesos, but political pressures due to an election next May made the 264-member House of Representatives uneasy about approving it.

On Tuesday, the lower house of Congress was supposed to begin debate on the tax on text messages, in the hope that it could be approved before lawmakers go on a month-long break next month.

But, there was no debate after the majority bloc agreed to a motion from the opposition to return the proposed tax measure to the ways and means panel for further discussion, Javier said.

Some consumer groups had gone to court to stop lawmakers from approving the measure.

The country's three mobile phone companies have also opposed the proposed tax on text messages, describing the revenue measure as "anti-poor" and "discriminatory" because the additional levy will be a burden on low-income consumers.

The government has said it is likely to run up a budget deficit target of 250 billion pesos, or 3.2 percent of GDP, this year.