National strike in Colombia against tax reform …

The President of Colombia Ivan Duque presented to Congress a tax reform project with two central axes: Increase in VAT and broadening the tax base on wages. The measure could not have been more badly received by society. Duque succeeded in unifying a conglomerate of unions, indigenous people, students, political parties and SME organizations, which organized a national strike this wednesday with mobilizations throughout the country. They reject that the government finance the covid-19 crisis by touching the incomes of the middle class and working-class sectors. Moreover, they claim that eliminate the benefits for large companies. In short, a critique of the neoliberal model, of which Colombia is one of its great representatives in Latin America.

Against the “packageazo”

The night before 28A, as its organizers called this strike, justice tried to stop the measurement of force. The administrative court of Cundinamarca (department to which Bogotá belongs) had ordered the suspension of the marches. However, the National Unemployment Committee (CNP) which brings together more than 50 labor and social organizations, maintained the appeal. “For peace, for life, for democracy and against Iván Duque’s packageThis is the motto with which they met, asking that the biosecurity measures be respected, since Colombia is in third full wave of coronavirus.

From the start, columns of people were seen marching through the streets of Bogotá, Cali and Medellín. There have been roadblocks and mobilisations that have targeted government buildings. Meanwhile, the president spoke at an event that commemorated a year since Colombia joined the Organization for Economic Co-operation and Development (OECD). There he was ready to dialogue. “As a government, we want to reach consensus with Congress, without red lines, thinking about revenues that stabilize finances and keeping the most vulnerable protected for as long as needed.“Said the president.

The tone seemed very different from that of the previous days, when Duque was defending the project of Sustainable Solidarity Act, as the government calls tax reform. The president said the country needed to raise funds to alleviate the crisis caused by the pandemic. “This is not about tax reform, it is about financing the country for what the pandemic was and the economic consequences it had.“Said the president. The Minister of Finance, Alberto Carrasquilla, had explained that with this law, they intend to collect 23 trillion pesos (six billion dollars) consolidate public finances. More specifically, the proposal made up of 163 articles establishes: broaden the VAT base, increase the tax on salaries and assets of natural and legal persons.

From Central Workers’ Unit (CUT), the most important trade union entity in the country which brings together 700 thousand people, cataloged the law as a blow to the middle class and lower sectors. “The extension of VAT will fall on products in the family basket that are not taxed. From there, some ten trillion pesos will be collected, ”CUT General Secretary Diógenes Orjuela told Page 12. The leader also criticized the idea of ​​increasing the number of workers who pay a payroll tax. “Three million more would pay. The government would lower the tax base to 2,500,000 Colombian pesos, whereas it was previously at 4,200,000“Said the union leader.

The pandemic has hit the Colombian economy hard. Over the past year, unemployment has risen by five points according to official data, reaching 15.9 percent of the population. As poverty is around 38.9%, according to data from CEPALC, while local consultants claim it is almost 50 percent of the country. The government launched in April last year the Solidarity income received by some three million vulnerable families. The sum they will receive until June of this year is equal to $ 43 per month, when the minimum wage is $ 259.

Reduce

From the union sector, they say that the tax reform does not affect large companies. “It maintains privileges for multinationals for nearly 40 billion Colombian pesos per year. We told the government to remove these privileges and they would have enough money to resolve the crisis and much more, ”said the CUT chief. For its part Jairo Estrada, Doctor of Economics and professor at the National University of Colombia, criticized the alleged “Tax on large fortunes” envisaged by the government project. “What should be collected from there does not compare to what is supposed to be obtained from the middle and lower sectors of the population.“Said Estrada. This tax will be one percent for personal cash above $ 1,300.00, and two percent above $ 4 million.

In accordance with the demands of trade unions and social organizations, Estrada maintains that it is necessary to tax financial income. “The exemptions imposed over the past two or three decades must be abolished, within the framework of neoliberal logic, to encourage investment by transnational corporations.. These policies have not benefited society. This reform leaves only those who have the most income and assets, ”said the economist. In turn, he criticized the government’s social policies. “These are ridiculous grants that can be around $ 50 or $ 60 a month. At the same time, we are talking about subsidizing small and medium-sized enterprises, which is not bad, but In Colombia, the highest employment is found in the informal sector of the economy and is not favored by these policies.“Said Estrada.

In this context, we learned that the Colombian government was going to renew its fleet of military planes. Duque plans to buy 24 fighter jets for a total of $ 4 billion. Estrada pointed out that Colombia is the second country in the region with the highest military spending, after Brazil. “We spend $ 9.2 billion on security and defense. We are faced with a government policy which gives only a military and repressive response to the needs of the regions ”, declared the economist.

In this sense, the streets also complained about the escalation of violence against leaders and social leaders. The senator Ivan Cepeda, of the Polo Democrático Alternativo party, declared that in 2020, more than 270 signatories to the peace agreement were assassinated. “The massacres, forced displacements, the establishment of mines have returned. Phenomena which had managed to disappear with the peace agreement of 2016, and which with this government reappear, not at the same rate, but it is awakening this kind of violent actions ”, declared Cepeda. For the senator, this is Duque’s policy for electoral purposes. “The presidential elections are taking place next year. He waits until we reach this moment with an escalation of violence that puts the need for authoritarian and authoritarian government back on the agenda.“Said the politician.