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One cent tax on texts could have raised €590m in the last five years

Estimates from the Department of Finance were based on placing a one cent tax on the 59 billion text messages that have been sent over the last five years.

Image: Modern mobile phone via Shutterstock

A ONE CENT levy on text messages could have yielded the State nearly €600 million over the last five years, according to the Department of Finance.

But Finance Minister Michael Noonan has ruled out the possibility of any such tax on text messages being introduced in response to a recent parliamentary question, stating the “levy’s imposition could result in considerable behavioural impact among consumers”.

In answer to a question posed by the Fianna Fáil TD Michael Kitt, Noonan said that figures from the communications regular, ComReg, showed that 12.3 billion SMS messages were sent in Ireland last year as part of 59 billion text messages sent in the last five years to the end of December 2012.

Based on these figures the Department of Finance calculated a yield over the last five years of in the region of €590m, and a yield in 2012 alone of around €123m from a 1 cent levy.

Noonan cautioned that the yield could not be “directly inferred from the SMS traffic figure” and said that the levy would have “significant implications” for the charging arrangements of providers.

Speaking about the possibility of introducing such a tax on texts, Noonan said: “While any additional revenue would be welcome in the current circumstances, wider social and economic factors which may militate against the introduction of a further tax on text messages would also have to be taken into account.”

He said it must also be noted that texts and mobile phone calls are subject to VAT of 23 per cent.

“An additional flat rate levy of the order referred to by the Deputy on text messages could significantly increase the overall rate of taxation on accounts, particularly given that the average monthly spend per user is of the order of €35,” the Minister added.

2011: Noonan rulez out tax on txts :)

Read: Taxes on texts and junk food proposed by Social Justice Ireland

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Hugh O'Connell

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