Colombia government sends US$3.9 billion tax reform to congress amid renewed protests
Colombia's government on Tuesday formally presented a US$3.95 billion tax reform bill to congress, even as unions and student groups seek to revive the street protests that helped scupper the reform's original iteration.
BOGOTA: Colombia's government on Tuesday (Jul 20) formally presented a US$3.95 billion tax reform bill to congress, even as unions and student groups seek to revive the street protests that helped scupper the reform's original iteration.
The law would raise 15.2 trillion pesos per year, significantly less than the 23.4 trillion pesos sought by the government in an April proposal that was later withdrawn amid sometimes-deadly protests and lawmaker opposition.
The government of President Ivan Duque insists the law is vital amid rising debt and an expanding fiscal deficit and must be passed to shore up social programs and allay investor fears about the country's medium-term fiscal management.
"The social investment law, which we will build between all of us, is the largest jump in human development in recent decades," Duque told lawmakers as he opened congress's second legislative period of the year on Colombia's Independence Day.
Standard & Poor's and Fitch have already cut Colombia's credit rating to junk.
The bill would increase businesses' taxes by 4 percentage points to 35 per cent from 2022, raising some 6.7 trillion pesos.
It would raise another 2.7 trillion pesos by fighting evasion and enshrine 1.9 trillion pesos in public spending cuts, among other measures.
The finance ministry has emphasized the bill will not affect most taxpayers, after a proposed increase in sales tax in the April version drew special ire.
Protesters, including some from indigenous communities, were expected to gather in Bogota, among other cities.
Mass protests began on Apr 28 and lasted some six weeks, occasionally turning violent.
The attorney general's office has directly linked more than two dozen deaths to the demonstrations, 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.
Some 700 people had gathered at about a dozen protest spots as of 10:30am local time, the Bogota mayor's office said in a report.