Proposed text tax could send phone bills through the roof

7 Oct 2010

Calls for a new tax on mobile phone text messages from Social Justice Ireland (SJI) have been labelled as arbitrary and regressive by Fine Gael communications spokesperson Leo Varadkar TD.

Varadkar has rejected the tax proposal, saying it would be “arbitrary, regressive and would impact more on young people and those on lower income than wealthier people”.

Varadkar made his comments after SJI suggested that this new tax should be introduced in the run up to this December’s Budget.

A tax on text messaging makes no sense

“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 5pc increase in phone bills at a time when people’s incomes are being squeezed,” he said.

“There is already is a tax on text messages. It’s called VAT and the highest rate, 21pc, is already being levied on phone bills. A text tax would in fact be an excise duty added on top of that,” Varadkar added.

Social Justice Ireland also wants text messages taxed as part of its alternative Budget, which it says would create 100,000 part-time jobs for the long-term unemployed.