GMA:  GOVT  WILL  TAKE  BRUNT  OF  REFORMS  TO  INCREASE  SAVINGS

MANILA,  July 30, 2004
(STAR)
By Marichu Villanueva  -  President Arroyo assured the nation yesterday that the government will take the "brunt" of cost-cutting measures to save at least P100 billion and reduce the budget deficit.

"Government will take the brunt of administrative reforms even before asking the public to take more pain in terms of more taxes for future gains in terms of more jobs and better services," she said in a statement from Malacañang.

"We are proving to the people that we ourselves are worthy of the sacrifices we ask for, and we are confident that Congress will do its share."

Mrs. Arroyo has justified the need to impose new taxes, although her tax bills have met stiff opposition in Congress.

"We acknowledge the need for quick financial fuel as well as longer term financial stability," she said.

"The quick fuel will be provided by cost-cutting measures, organization streamlining, going after tax cheats and fighting corruption."

Last week, Mrs. Arroyo said she would push Congress to pass into law eight tax bills to raise an additional P80 billion in revenue yearly for the government.

Mrs. Arroyo has also sent to Congress the following tax bills:

• The shift to gross income from net income taxation.

• Tax on windfall telecom income.

• Indexation of "sin" taxes on liquor and cigarettes, and petroleum products.

• Rationalization of fiscal incentives.

• Use of targeted tax amnesty.

• Creation of a performance-driven system for revenue agencies.

Another cost-cutting measure is the planned retirement package for excess government employees through a bill seeking "government re-engineering," she added.

Meanwhile, Mrs. Arroyo said in a television interview that government plans to borrow from foreign creditors to attain a "balanced budget" at the end of her term.

"This (new loan) is for restructuring for longer payment period," she said.

"But we need to cut down on loans... so many of the things we would do now is to pay our debts and not just the interests."

Mrs. Arroyo said the government’s budget deficit is largely due to a low revenue base as the country has one of the lowest tax collections in the world.

"So even if they (lawmakers) said ‘improve efficiency in tax collection,’ yes perhaps we can collect a couple of billion (pesos), it would increase," she said.

"But our deficit is over P200 billion every year. So we really need to be at par with other countries in tax collections."

The country must adopt a parliamentary system of government to allow the executive to "ram" through the legislature important tax bills, she added.


Reported by: Sol Jose Vanzi

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