MINISTER FOR Finance Michael Noonan has ruled out a “tax on teenagers”, saying he will not put an additional levy on text messages above the current VAT rate.
Mr Noonan warned any such charge could be passed on to customers if imposed on mobile telephone companies and argued it was impossible to estimate the potential yield of such a tax. He was responding to a suggestion from Labour Party backbencher Aodhán Ó Ríordáin.
“Text messages are currently subject to VAT at 21 per cent. A levy on text messages could have a behavioural impact if it was directly imposed on customers or imposed on the mobile telephone companies and passed on to customers,” Mr Noonan said.
“Thus it is not safe to estimate the potential yield of such a tax from the current level of text message usage.”
In Labour’s April 2009 pre-budget submission, the party proposed a one cent tax on the 25 million text messages sent every day.
Mr Ó Ríordáin revived the suggestion in a Dáil question to Mr Noonan, asking the Minister if he had considered pursuing such a proposal and to outline the legislation needed to enact it.
Mr Noonan said such a levy would probably be classed as a stamp duty charge, so legislation required to enact it would be contained in a Finance Bill as an amendment to the Stamp Duties Consolidation Act 1999. However, he ruled out introducing such a measure for the time being. “I am not aware of a similar tax anywhere else in the world and I have no plans to introduce such a tax at this time.”
Mr Ó Ríordáin told The Irish Times he believed texting was a “luxury” and not something that people needed to do. “We’re in a fiscal hole and we are considering things we’ve never considered before. If you’re looking at luxury items, I’m convinced texting is one,” he said.
Expressing some disappointment at Mr Noonan’s response, Mr Ó Ríordáin added: “The department seems to be ruling it out.”
A similar proposal was previously put forward by former minister for health Mary Harney and former Green Party minister of state Mary White, as well as Fr Seán Healy of Social Justice Ireland.
Irish people are believed to be among the world’s most profilic texters.
