Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ World https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ The President of Colombia dropped the tax plan after bloody protests

The President of Colombia dropped the tax plan after bloody protests

President Ivan Duque has withdrawn a plan to raise taxes for many Colombians after sparking days of bloody street clashes and a political crisis.

Duque is abandoning some of the most unpopular ideas, such as extending the value-added tax on additional goods and services and imposing more income-taxable people. Colombia needs to raise revenue to protect its investment grade credit rating and tackle the growing poverty caused by the pandemic by funding social programs and providing remittances to the most deprived citizens.

The president on Sunday called on lawmakers to urgently reach a consensus on a new proposal to help the country get out of the deteriorating fiscal hole. The country̵

7;s bonds and currency have weakened in recent weeks after the government’s plans were rejected by almost the entire political establishment, including Duke’s own party.

The decision to abandon the bill less than three weeks after its introduction is another blow to Duque and undermines his chances of adopting other reforms before his term expires next year, said Sergio Guzman, director of Colombia’s Risk Analysis. The government has been under pressure from days of street protests that have killed at least six people.

“The government has replayed the reform, lost and now remains in a really bad position in front of the electorate,” Guzman said. “That effectively makes Duque a lame duck.”

Read more: Colombia sends troops to cities amid protests against tax bill

Colombia is among the first major emerging markets to try to apply large tax increases to regain control of its bubble burden. Other countries in the region may face similar difficulties in trying to boost revenues in economies that are still devastated by the pandemic and have barely recovered from last year’s downturn.

Many Latin American countries are also struggling with deficits that widened during the pandemic, but unlike Brazil, Mexico, Chile and Peru, Colombia’s deficit will increase rather than narrow this year, according to the International currency fund.

Street protests

Addressing the nation on Sunday, Duke called on Congress to quickly draw up a new plan “and thus avoid financial uncertainty.”

“Reform is not a fad. Reform is mandatory, “he said.

A new bill should support measures to protect the most vulnerable Colombians, while raising taxes for the rich, Duque said. He vowed that no one would pay income tax who no longer paid it.

Source link