Former President and now Pampanga Rep. Gloria Macapagal Arroyo did not approve proposals to increase the fare at the Metro Rail Transit (MRT) and to collect a value-added tax (VAT) on toll rates because the profits from these measures are negligible, compared to the adverse effects that it would bring upon commuters and the economy, her spokeswoman said on Saturday.

Elena Bautista Horn, who used to serve as undersecretary of the Department of Transportation and Communication (DoTC) under Mrs. Arroyo, said her boss considered the inflationary effects of increases in the transportation expenses of the working class when she rebuffed proposals from her Cabinet to collect VAT on toll fees and raise MRT fares.

Horn said Mrs. Arroyo was not trying to be popular when she denied the imposition of these proposals which were broached towards the end of her term when she was suffering record unpopularity.

Mrs. Arroyo’s rejection of these proposals was not even made public until President Aquino’s spokesman noted that she refused to impose two memorandum circulars from the Bureau of Internal Revenue (BIR) in 2005 and 2009, in a bid to inform the public that the VAT on toll rates is not the initiative of the Aquino administration.

“These proposals were indeed made in the Cabinet towards the end of her term, but the former President considered the inflationary effects that the increases in transportation expenses of commuters would have on the economy. If you raise the transportation expenses, the prices of everything would have to increase,” Horn said.

Horn said the collection of 12 percent VAT on toll was proposed to Mrs. Arroyo in late 2009, but she left it to the next administration to interpret the VAT law because the senators and congressmen who crafted the law were of the intention when they passed the law that toll is not covered by 12 percent VAT because toll is already a form of tax.

She said there were legal, technical, and operational issues in imposing VAT on toll which remained unresolved when Mrs. Arroyo turned over the government to President Aquino.

Horn added that the collection of VAT on toll and the increase in the MRT fare would have negligible effects to the government’s cash position, so Mrs. Arroyo directed her Cabinet instead to look for other ways to raise revenues, without imposing these revenue measures that could have inflationary effects, aside from bringing a huge burden upon commuters.

“Right now, a minimum wage earner, who has no escape from any imposition of tax, spends 30 percent of his daily wage to get to work. If you increase his transportation expenses, that percentage would rise to 50 percent. So the policy was to look for other sources of revenue instead of imposing measures that would increas transportation expenses,” Horn said.

The BIR and Malacañang were earlier bent on imposing the 12 percent VAT on toll by Monday, until the Supreme Court last Friday granted petitions from various sectors to stop the collection of VAT on toll fees.

The National Council for Commuters’ Protection (NCCP) said the BIR’s intractable position on collecting the 12 percent VAT on toll was putting the President in a bad light.

NCCP President Elvie Medina, who attended the Senate investigation on the collection of VAT on toll, said BIR Commissioner Kim Henares’ insistence on imposing VAT on toll creates an impression that the President is counting on the people, whom he considers his bosses, to foot the bill every time the government needs money for its projects.

“What’s happening is that the BIR considers us their boss, but in the sense that if we all go out for dinner, kayo ang boss kaya kayo ang taya (you’re the boss so you’d have to pay the bill),” Medina said.

She added that the BIR will also round off to the nearest peso the increased fees that will result when the VAT is imposed, resulting in the imposition of about 15 percent VAT instead of just 12 percent.

“It just shows that this administration is just concerned about money, and not the welfare of the people, especially the 60 million commuters,” Medina said.