The detractors of the reform They explained that it will increase “poverty, unemployment, inflation and the dollar.” The Colombian government defended its benefits for citizens and fiscal coffers.
The tax reformof the Colombian Government headed by Gustavo Petro, approved by Congress this week, has aroused loves and hates among the different political and economic sectors that have expressed their opinions regarding the texts voted by both chambers.
Initially, the Government sought to raise 25 billion pesos (about 5,000 million dollars) with the reform, but the changes made to the bill they reduced a fifth of that figure to 20 billion by 2023 and an additional 23 billion by 2026.
In recent weeks and during the debates some of the initial proposals changed. Two of them, for example, are that high pensions will no longer be taxed and that the surtax on oil and coal will be applied based on international hydrocarbon prices.
However, the Government’s proposal to put a surcharge on income tax in oil and coal companies, of 10% in the first year, and a progressive wealth tax for four years for high incomes.
Also increased the tax on ultra-processed foods and sugary drinks -with some exceptions- from 10% in 2023, which will increase to 20% by 2025.
A “social reform”< /h2>
“Congress approved a historic law whose purpose is to help reduce an enormous social debt.It is a tool that will help eradicate hunger, reduce poverty and inequality, as well as the privileges of a few, and make progress against inequality”, said the Minister of Finance, José Antonio Ocampo.
Minister Ocampo said that monetary poverty would be reduced by four percentage points, which is equivalent to two million people, that is, “thousands of households throughout our geography that they will have a better life.”
He also pointed out that this is the most liberal tax reform in history and the most consensual, as the senior official has spent more than 300 hours addressing concerns and resolving doubts from various sectors to have the &# 8220;greatest possible consensus”.
David Racero, president of the House of Representatives, assured that it was approved “the fairest and most social tax reform in history” , while representative Jorge Bastidas, coordinator of the bill in the Chamber, pointed out that what was approved seeks to help overcome inequality.
In Colombia, he said, there are 560,000 children with chronic malnutrition, 19 million people live with 11,800 pesos a day (about 2.3 dollars), 94% of the country’s tertiary roads are in poor condition and 12 million people have poor access to water.
Doubts
The executive president of the Colombo-American Chamber of Commerce, María Claudia Lacouture, stated that the approved reform will affect the viability of the business fabric and adds to the complex economic context that the country is experiencing due to inflation.
“A tax reform was approved despite efforts to make visible, with arguments, before the Government and Congress, that the competitiveness of companies will be negatively affected and their ability to attract investment and create jobs will be weakened formal as a mechanism to overcome poverty”, he said.
The also former Minister of Commerce, Industry and Tourism added that “the approved project will bring more complications to the national economic panorama”.
“The changes in the rules for free zones and taxes for the mining and energy sector, as well as taxes on products from the family basket, will have an impact on the creation of new jobs in the medium term by losing essential elements for the country’s competitiveness&# 8221;, he said.
For its part, the Democratic Center, the main opposition party, considers that what has been approved will increase “poverty, unemployment, inflation and the dollar” ;.
“This tax reform suffocates the middle class, hits low-income households and puts the fiscal sustainability of the country at risk. We opposed the tax on hydrocarbons, which will also make the energy transition impossible”, said Senator Miguel Uribe.