VAT as a defeat of Duque



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It was clear that the financing law would contain a new tax reform. It was clear that in this trance, I would propose to tax the products of the family basket with a VAT rate. It was also clear that this tax would not be applied.

This is the usual game of executive and legislative powers, which traditionally results in a bargaining scenario in which there are usually concessions from both sides.

In fact, this time, the game had particular elements: the head of the government had not reconciled the bureaucratic relations with the Congress, which had disadvantaged him before his interlocutors of the budget commissions.

Therefore, it had to happen as do those who go with weakness in confrontation: speak loudly.

Calls for VAT, the most unpopular tax of the entire tax structure, have come. Putting the levies on 80% of the family basket was something that members of Congress would not accept in an election year like the one to come.

And as it happened. As the urgency of funding was eloquent, because otherwise, it would be necessary to reduce investments and social programs, senators then rushed to consider in other companies and sometimes other proposals alternative . Yesterday, as they said, about 100 people got 8 of the 14 billion pesos that the country needs.

In the next few hours, when the project is finally submitted to the first debate, they will begin to know each other.

None of them, however, touch on an essence that President Ivan Duque emphasized during forums and hearings, without many people noticing. The law, he said, should reduce the tax burden of employment-generating enterprises.

It is a paradigm on which governments have been based for some time in Colombia. This is not, to clarify, a case of this government: they did Duque, Santos, Uribe, Pastrana, Samper, Gaviria and Barco, to name only the most recent presidents.

With them, not only have corporate taxes been reduced, but labor and pension reforms have been approved, helping to reduce the burden of production costs for industries.

Do you know what is the problem? Although these costs have been reduced, they have, in rare cases, clearly contributed to boosting the economy through employment. In other words, their extraordinary profits have resulted in tax havens in Aruba, Panama or Curacao.

Duque therefore has the challenge of changing this story, having won, as he has apparently done, a first victory in the Congress of the Republic, which has not only detractors among the opposition parties, but in his own community. , the clean, which does not include new leaders. Will it succeed? Who knows. My suggestion is that we have faith.

@ AlbertoMtinezM

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