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‘Arbitrary regressive stealth tax’ makes no sense, sets precedent for further stealth taxes

 

Fine Gael Communications Spokesperson, Leo Varadkar TD, has rejected calls for a new tax on mobile phone text messages saying that it would be arbitrary, regressive and would impact more on young people andthose on lower income than wealthier people.

 

Deputy Varadkar made his comments after Social Justice Ireland (SJI) called for the introduction of this new tax on Monday. Similar proposals had been made by other political parties in the run up to last December’s budget.

 

“A tax on text messages makes no sense. It would be an arbitrary regressive stealth tax and would set a bad precedent for the further stealth taxes in the future.

 

“On the face of it, a text tax seems to hold some credibility with people only having to pay 1 cent or less every time they send an SMS. However, in reality, it would add considerably to phone bills. If you send 10 texts a day, it would add €36 a year to your bill. That’s not far off a 5% increase in phone bills at a time when people’s incomes are being squeezed.

 

“What’s more, there already is a tax on text messages. It’s called VAT and the highest rate, 21%, is already being levied on phone bills. A text tax would in fact be an excise duty added on top of that. Excise might make sense when it is added to things we want to discourage such as alcohol, tobacco and fossil fuels but there is no such case for a tax on telecommunications. It would also be regressive, affecting young people and poorer people more harshly than others.

 

“I also think that it could give rise to other arbitrary stealth taxes. If we introduce a 1cent tax on text messages in this budget, why not introduce a 1cent tax on tea bags, bananas or milk cartons on the same basis in the next budget? Taxes should be imposed on a rational basis not on an arbitrary one.”