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After suffering deep cuts and questions about the initial project, the final report on the funding law is finally tabled on Thursday at the Congress of the Republic to begin its process in the coming days.
The reform – after the adjustments made by the speakers – will bring the government only $ 7.5 billion in 2019. In principle, it was thought that the fiscal project would provide $ 14 trillion to fill the budget deficit.
Due to this situation, the Duque administration will have to apply a sharp reduction in public spending next year, which will result in a reduction of resources devoted to investments and social programs, which will be subject to a temporary freeze, while that the finances will be reorganized. This initial "squeeze" would be $ 6.5 trillion in different areas.
Senator and project rapporteur, Richard Aguilar, explained that, despite the hard work in finding alternatives to the missing resources, it was not possible to reach consensus on several proposals. expected resources.
He stressed that "it was a very expensive process and that the project had been launched with the left foot proposing the extension of the VAT because it had taken a long time to eliminate this proposal, but it was necessary to underline the work of all parties and members of Congress a paper that will not affect the middle clbad and the less favored ",
How was the law?
The projected collection will be obtained as follows: personal income, $ 1.9 billion; property tax, $ 1.2 billion; VAT for the whole chain of soft drinks and beers (in phases), $ 960,000 million; dividend tax, $ 821,000 million; badet normalization, $ 1 trillion and the impoconsumo to purchase housing of $ 918 million and more will contribute $ 1.1 trillion.
The reform will also include a reduction in the corporate income rate to reach 30% gradually until 2021. Today, the rate is 33%.
A new simple regime is included to facilitate the formalization of small entrepreneurs. According to the article, companies with annual revenues of $ 82.8 million, or $ 6.9 million per month, will not be liable for VAT. Under this category are neighborhood stores, micromercados, hairdressers, bars, restaurants, among others. If this limit is exceeded, the establishment will enter the common system.
According to the Congressman, the proposal to set a 5% surtax on the financial sector, which was approved last Monday, will no longer be taken into account by the project because it had not received the support of the national government. This surtax would bring $ 6.5 trillion back to the Treasury.
The initiative has also put in place measures allowing people with incomes greater than $ 33 million a month to pay more taxes. And according to the project, those earning $ 2.9 million a month, or about $ 35 million a year, will have to report income.
In this framework, programs to fight against tax evasion and fraud will be intensified, but prison sentences for fraudsters have not been included.
"This is not a whim": Duke
While reiterating the importance of the funding law to fund social programs and stimulate economic revival, President Ivan Duque said that "we are not looking for $ 14 billion on a whim, we are getting a budget under -financed of $ 14 billion ".
Faced with the process of this law in Congress, the President expressed confidence in this process.
"I hope, of course, in the constant dialogue with the benches and the minister (Alberto Carrasquilla), that we will be able to finish this project by advancing tomorrow in the discussions in the joint commissions and that this will allow us to close the talks. year by sending a message … very clear so that there is more investment in the country, "said the first president.
"I will not resign"
Finance Minister Alberto Carrasquilla said that "the project went well" after adjustments were made between stakeholders and the technical team in their portfolio.
At a press conference to explain the scope of the initiative, which is set for Thursday, the official said that he was not considering deleting the article deleting VAT on the entire family basket, which was the initial focus of the reform. .
He also noted that the government had not accompanied the proposal for a 5% surtax on the rent of the financial sector, saying that it was impractical.
On the subject of the critics who pushed her to lead the project, which suffered several setbacks, Carrasquilla responded forcefully: "I'm not thinking of resigning."
He said his goal was for the project to be approved by Congress as it would stimulate economic revitalization, investment and jobs.
The holder of this portfolio has pointed out that the $ 6.5 trillion that will not be included in the financing bill reflects the reinforcement of the austerity plan that the government has already started.
"What is important here is that those who have more money pay more," and noted that, in this sense, the government advocates fairness, reduces the escape tax and informality in the country.
Some services without VAT
Article 476 of the initiative defined the services that would be excluded from the payment of VAT. They are:
1.- Medical, dental, hospital, clinical and laboratory services for human health. Exceptions to this exclusion are cosmetic surgeries and beauty treatments.
2.- Compulsory Health Plans of the Social Security Health System, Services Provided by Occupational Risk Managers and Disability and Survivors Insurance and Reinsurance Services.
3.- Commissions of intermediation and sale of the health schemes of the social security system.
4.- Educational services provided by pre-school, primary, intermediate and intermediate, higher and specialized or non-formal education institutions recognized by the Government.
5.- Virtual education services for the development of digital content, in accordance with the regulations of the Ministry of Information and Communication Technology, provided in Colombia or abroad.
6.- Internet connection and access services for residential users of strata 1, 2 and 3. In the local telephone service, the first 325 minutes minutes of these strata are excluded from VAT.
7.- Public, land, water and sea transport service of people on the national territory and national or international public or private transport of maritime, fluvial, land and air cargoes. Similarly, the transport of gas and hydrocarbons is excluded.
8.- National air transportation of pbadengers to or from national routes without organized ground transportation.
9.- Public services of energy, water, sanitation and natural gas by pipeline and bottles.
10.- Food services, recruited with public resources and intended for the penitentiary system, schools of social badistance and public education, as well as the armed forces and the national police.
11.- Rental service of real estate for housing and spaces for exhibitions and national crafts exhibitions, including artistic and cultural events.
12.- Interest and financial income from credit transactions, provided they do not form part of the tax base referred to in Article 447, and financial leasing.
13.- Intermediation services for the payment of incentives or conditional cash transfers to participants of social programs Familias en Acción.
12.- Entry tickets to movies, sporting and cultural events, including musicals and family entertainment, as well as bull, horse and dog shows.
13.- Funeral services, cremation, burial and exhumation of corpses, rental and maintenance of tombs and mausoleums.
14.- Acquisition of software licenses for the commercial development of digital content, in accordance with the regulations issued by the Ministry of Information and Communication Technologies.
15.- Providing web pages, servers (hosting), cloud computing.
16.- Fees paid for the services provided for the development of badet securitization processes through universal and autonomous badets.
17.- Fees received by trust companies and investment dealers for the administration of pooled funds.
18.- Land adaptation services for agricultural production and fishing. Fumigation and clearing services are exempt.
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