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Colombian government sends $ 3.9 billion tax reform to Congress amid renewed protests

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BOGOTA, July 20 (Reuters) – The Colombian government officially presented a $ 3.95 billion tax reform bill to Congress on Tuesday, even as unions and student groups sought to revive street protests which helped to defeat the initial version of the reform.

The law would increase 15.2 trillion pesos per year, significantly less than the 23.4 trillion pesos the government wanted in an April proposal that was later withdrawn amid sometimes deadly protests and opposition from lawmakers.

The government of President Ivan Duque insists that the law is vital in an era of rising debt and increasing budget deficit and must be passed to consolidate social programs and allay investor fears about medium-sized fiscal management. term from Colombia.

“The Social Investment Law, which we will build among all of us, is the biggest leap in human development in decades,” Duque told lawmakers as he opened the second congressional legislature of the year Colombian Independence Day.

Standard & Poor’s and Fitch have already lowered Colombia’s credit rating to the trash.

The bill would increase corporate taxes by 4 percentage points to 35% from 2022, which would raise some 6.7 trillion pesos.

This would make it possible to raise an additional 2.7 trillion pesos by combating tax evasion and devote 1.9 trillion pesos to cuts in public spending, among other measures.

The finance ministry stressed that the bill would not affect most taxpayers, after a proposal to increase the sales tax in the April version aroused particular anger.

Protesters gathered in Bogotá expressed skepticism about the government’s promises to reform the police and improve opportunities for young people, including a 25% minimum wage subsidy for companies that hire young people between the ages of 18 and 28, a provision of the tax reform.

“What is missing is that they listen to us. We are not criminals to go out into the streets to demand our rights,” said Antonio Montes, 24, baker. Behind him, a band was playing on a temporary stage and vendors peddled snacks, soft drinks and beer.

Several thousand people gathered at 23 protest sites in the capital, Bogota City Hall said.

“How can it be fair that they buy guns with our taxes to kill ordinary people? We have come to support young people,” said Alicia, 68, a retired Education Ministry employee.

A wave of mass protests began on April 28 and lasted for about six weeks, at times turning violent.

The attorney general’s office has directly linked more than two dozen deaths to the protests, while rights groups say they have confirmed many more.

Major unions have said they will propose 10 reforms to Congress, including the creation of a basic income.

($ 1 = 3,842.97 Colombian pesos)

Reporting by Julia Symmes Cobb; Editing by Steve Orlofsky and Howard Goller

Our Standards: Thomson Reuters Trust Principles.


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