RP government stands to earn P5.8 billion windfall tax from the P58.1 billion in cash dividends of three telcos service providers to be paid out to their shareholders next month.  Windfall profit tax is a tax on profits that ensure from a sudden windfal gain. This tax will, in addition to the normal corporate tax, be payable by the business/industry on its profits.

PLDT, Globe and Piltel announced one after the other that they would pay a total of P29.8 billion in cash dividends to their shareholders. That is on top of the combined P28.3 billion paid by PLDT and Globe to their shareholders last summer. PLDT gave out a total of P23.4 billion in dividends at a rate of P124 per share on Aril 21. Globe paid a total of P4.9 billion in dividends at a rate of P37.50 per share on March 13. PLDT is the parent firm of both Smart Communications Inc. and Piltel, which have 32.2 million in combined cellular subscribers as of end June 2008. Globe is the country's second largest cellular operator. with a total of 22.7 million subscribers as of end June 2008.

PLDT, Globe and Piltel are all publicly traded companies whose common shares maybe freely bought and sold through the Philippine Stock Exchange. Good to know that this solid gains of the telcos industry will flow through government and then back to the people and this extra revenues can be used to support vital social programs or subsidized impoverished families.

The only other major telecommunication service provider that has not been paying dividends is Digital Telecommunications Philippines Inc., which has not been generating a profit. Digitel has more than six million cellular subscribers.

Meanwhile, the government is seeking the imposition of a windfall profit tax on oil companies which continues to make excessive  earnings at the expense of consumers. The two biggest oil firms - Petron and Shell made nearly P70 billion in commulative net profits in the first 10 years of oil deregulation.

This way, consumers won't pay for the tax and thus protects the poorest families from rising fuel bills.

Back In 1980, the U.S. Congress imposed a temporary windfall profit tax on the sky-high earnings of oil producers that gained in a big way from the sharp increase in oil prices during the embargo imposed by the Organization of Petroleum Exporting Countries. The Crude Oil Windfall Profit Tax Act in the U.S. lasted for eight years, until it was repealed in 1988, amid the fall in oil prices. However, steep pump prices and record-high profits generated by American oil firms have prompted several members of the US Congress to seek the revival of the windfall profit tax.