Arroyo favors tax reform

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Metro Manila (CNN Philippines, August 29) — The administration's tax reform program has found an ally in House Speaker Gloria Macapagal-Arroyo.

In an exclusive interview with CNN Philippines' The Source, Arroyo said she favors the Tax Reform for Inclusion and Acceleration (TRAIN) and subsequent tax reform packages.

"I am biased in favor of tax reform. I believe the tax reform of President Duterte will bring us to the next level of development," Arroyo said.

During her term as President, Arroyo  signed the Expanded Value Added Tax Act of 2005. Its notable provisions included the increase in corporate income taxes and the removal of VAT exemptions on petroleum, electricity, land and air transport, and services of doctors and lawyers. It led to higher revenue collection.

"In my time, my fiscal reforms were my most important and lasting legacy. Because as I said, they provided a platform for reducing our poverty rate from 39 (percent) to 26 (percent) and now, hopefully, to 14 percent by the end of the Duterte administration," Arroyo said.

As for the push to suspend TRAIN over its inflation impact, Arroyo said they should target other reasons for rising prices instead. The Bangko Sentral ng Pilipinas said inflation could peak this third quarter.

"But if you look at different causes of inflation, it was not the main cause. We have to address all the other causes," the Speaker said.

As for the proposed 2019 national budget, Arroyo said she would leave the work to the House committee on appropriations and the Department of Budget and Management (DBM).

"Even though I am the Speaker, those matters should be at the end of the day resolved by the Committee and the DBM together. It's not for me to say," she told CNN Philippines.

Arroyo shrugged off the supposed impasse caused by DBM's push for a cash-based budgeting system.

"There's no such thing as an impasse in the Philippines… it doesn't happen here," Arroyo said.

The Constitution provides that should Congress fail to pass a budget by the end of the year, the preceeding year's budget will be adopted the next year. The former President has been widely criticized for three reenacted budgets during her term in 2004, 2005 and 2006.

Arroyo was president from 2001 to 2010, following the resignation of former President Joseph Estrada and extended by the 2004 elections. The economy expanded during her term, breaching the 4 percent gross domestic product range annually despite the Global Economic Crisis of 2008.

However, Arroyo's term was also marred with controversies including alleged electoral fraud, human rights violations and corruption.