MANILA – Speaker Gloria Macapagal Arroyo has compared the Duterte administration’s tax reform program to her administration’s enactment of the Expanded Value-Added Tax (E-VAT) which was blamed for higher costs but was credited for a stronger economy.
Arroyo made the remark in an interview with GMA News amid criticisms against the Tax Reform for Acceleration and Inclusion (TRAIN 1) Law.
“Isa rin sa pinaka-importanteng repormang ginawa ko ay yung fiscal reforms din. Noon naman, yung mahirap na reform ay yung E-VAT. Pero yun ang nagbigay sa atin ng fiscal strength sa ating ekonomiya,” Arroyo said.
Since its enactment in December last year, TRAIN 1 has been blamed for the rising prices of basic goods and services.
Under the measure, the income tax of wage-earners was decreased but the excise tax on goods and services was increased.
The E-VAT Law signed in May 2005 gave Arroyo the power to increase value-added tax from 10 percent to 12 percent.
Aside from this, the corporate income tax rate was likewise increased from 32 percent to 35 percent, provided that it would be reduced to 30 percent by January 1, 2009.
The same 30-percent corporate income tax rate is what the second package of TRAIN (TRAIN 2) is aiming to reduce to 20 percent.
Arroyo stressed that while E-VAT Law also caused price increases, it nevertheless resulted in a stable economy.
She recalled that when she assumed the presidency in 2001, the country’s poverty rate was at 39 percent. It had gradually decreased since.
“Nung natapos ang aking administration, 26 percent na lang ang ating poverty rate at hindi tayo nagkaroon ng recession kahit na two-thirds of the world ay nagkaroon ng recession,” Arroyo said.
Following her election as Speaker, Arroyo said TRAIN 2, which has since been renamed as Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO), would be a priority of the House of Representatives under her leadership.
Aside from lowering corporate income tax rate, the measure also aims to rationalize fiscal incentives.
The House Committee on Ways and Means has already approved TRAIN 2, and is currently being considered for second reading in the Lower House. (ABS-CBN News)
