Franchise tax for telecommunications industry in the Philippines

We had the discussion in the Philippines about the plans to impose a tax on texting. This didn't go down too well with the population and it was put aside as a bad idea.

But the problem is that if a government sets its mind onto something that could generate some more revenues for them, they won't let go and find new ways to get their "pocket" filled.

Now, legislators came up with the idea to imposed a franchise tax on the country's telecommunications industry. This is a proposal in Congress for the passage of a law that will set aside a fixed percentage of the gross income of these telecommunications companies as tax. While the goverment says that it will be impossible to leverage the tax increase onto consumers, thus, consumers might be saved from additional burdens, companies say that sooner or later this additional charge will be levied. However, there is also opposition on side of the industry against this new tax proposal and it is quite good that the opposition comes from leading telecommunications company Philippine Long Distance Telephone Co. (PLDT) and its group chairman Manuel V. Pangilinan.

So let's see how the story evolves - and how hard the Phillipines tries to kick themselves out of the telecommunications game that they ruled so imposingly.

(By Asia Business Consulting)