The day after taking office in Colombia, Gustavo Petro’s government presented a tax reform project to Congress that would raise 25 billion pesos (R$ 29 million) next year to be earmarked for policies to combat poverty.
Finance Minister José Antonio Ocampo, a Harvard and Yale academic chosen in a nod to the market, said the measure could attract R$60 million annually into public coffers.
The reform would increase taxes for citizens with a monthly income of more than 10 million Colombian pesos (about R$12,000) and create a kind of permanent property tax. It would also raise taxes on exports of coal, oil and gold, part of an agenda to combat the climate emergency.
The money raised, explained Minister Ocampo, would be used to catalyze social programs, such as the fight against hunger, support for social security and investment in public and free universities. Oil and coal are the bulk of Colombian exports.
Measures would also be created to reduce tax evasion – which has cost the country from R$60 million to R$95 million a year, said the minister. Sugary drinks and ultra-processed foods would also be taxed, as would carbon emissions.
Ocampo told Reuters last week that it would be impossible to put Petro’s social welfare promises into practice without tax reform. He, one of the most renowned economists in the country, stressed that he would not do or allow “crazy things”.
In a social network, the Colombian Ministry of Finance said that the objective of the reform would be “to contribute to the equity and efficiency of the country’s tax system through tools that strengthen taxation and improve state collection”.
The economy, recent projections show, represents the main concern of Colombians. The country’s GDP, which grew 10.6% last year, is expected to perform worse this year, with a growth forecast of 6.5%. Inflation, which was 3.2% a year in 2018, when Iván Duque, Petro’s predecessor, was elected, reached the current 9.6%, and poverty increased from 36% to 42.5% of the population.
