‘Tax is not social, much less equitable’: Senator Luna

The tax reform advances its process in the Congress of the Republic, and while the Minister of Finance, José Antonio Ocampo, has been socializing the project and is already holding meetings with coordinators and speakers, the Radical Change Party announced yesterday that no will vote in favor of the project. Senator David Luna spoke with Portafolio about the reasons of the bench.

(Read: Taxes that yes or yes would remain in tax, according to Minhacienda).

What is the motivation for not supporting the reform?

The bench announced that it will not vote on the tax reform presented by the Petro Government. First, because it is neither social nor much less equitable; It directly and radically affects the less favored classes, and second, because it is a reform that is lying to society, because it says that the only ones who are going to contribute are the people with the highest incomes, and that is not true.

We are talking about issues that affect society in general, such as pensioners, as members of the productive sector, and that will ultimately affect employment.

What measures do you feel affect citizens?

The breaking point is populism, saying that what you want is for those who earn the most to pay taxes when this is not the case. Although it is true that they will have greater fiscal responsibility, there are also measures that will end up impacting other points.

We have focused on wage earners, on pensions of more than $7 million or $9 million, and we have overlooked the fact that the production chain will end up being affected significantly. The family basket is going to be highly impacted, not only because of the products that would be taxed, but also because of the tax on plastic and gasoline, a bag of salt, a bag of beans, a bag of peas, clearly they are going to have an increase in prices, the value chain, is going to affect prices.

The elimination of the exclusion for housing of social interest (VIS) and Priority Interest (VIP) has almost come to a standstill and the builders will be able to say it, there will be no more projects of these without that exemption because they are no longer possible to carry out happy ending.

On the business side, what elements could affect the dynamics of some sectors?

This is a zero equitable reform, it would be destroying many SMEs that manage to exist in Colombia due to the ICA discount, which is also being eliminated, and that is going to cause very serious problems.

There are other issues that we mention, such as the incentives granted to Colombian agriculture, issues related to companies that are going to see the impossibility of continuing to generate employment in the wealth, income and profit taxes, and a sector such as hydrocarbons, who is told to continue mining but not to export, and if he does not export to whom is the mineral going to be sold, and that ends up generating a very great difficulty.

(Also: Radical Change Party will not support the tax project).

Minister Ocampo has invited the congressmen to contribute other ideas, what are the proposals of Radical Change?

The Minister of Finance has never had the obligation or responsibility to oversee, this reform is not proposing a shock plan for the $80 billion of evasion and smuggling and we need a commitment from the Government to make it a reality, if that were a real goal, hardly any tax reforms would be needed.

Secondly, where is the state savings that was President Petro’s banner during the campaign? And thirdly, the most delicate thing is that a tax reform is being processed without knowing its designation. Where the approval of the Budget or the National Development Plan is contemplated, it is not. It is the desire to process it to show a political triumph.

At the head of Dr. Germán Vargas we presented these alternatives not once, but twice, but they have not been taken into account by the minister. The tax reform advances its process in the Congress of the Republic, and while the Minister of Finance , José Antonio Ocampo, has been socializing the project and is already holding meetings with coordinators and speakers, from the Radical Change Party it was announced yesterday that the project will not be voted in favor. Senator David Luna spoke with Portafolio about the reasons of the bench.

What is the motivation for not supporting the reform?

The bench announced that it will not vote on the tax reform presented by the Petro Government. First, because it is neither social nor much less equitable; It directly and radically affects the less favored classes, and second, because it is a reform that is lying to society, because it says that the only ones who are going to contribute are the people with the highest incomes, and that is not true.

We are talking about issues that affect society in general, such as pensioners, as members of the productive sector, and that will ultimately affect employment.

What measures do you feel affect citizens?

The breaking point is populism, saying that what you want is for those who earn the most to pay taxes when this is not the case. Although it is true that they will have greater fiscal responsibility, there are also measures that will end up impacting other points.

We have focused on wage earners, on pensions of more than $7 million or $9 million, and we have overlooked the fact that the production chain will end up being affected significantly. The family basket is going to be highly impacted, not only because of the products that would be taxed, but also because of the tax on plastic and gasoline, a bag of salt, a bag of beans, a bag of peas, clearly they are going to have an increase in prices, the value chain, is going to affect prices.

(Keep reading: Clothing manufacturers ask to include differential VAT in the tax reform).

The elimination of the exclusion for housing of social interest (VIS) and Priority Interest (VIP) has almost come to a standstill and the builders will be able to say it, there will be no more projects of these without that exemption because they are no longer possible to carry out happy ending.

On the business side, what elements could affect the dynamics of some sectors?

This is a zero equitable reform, it would be destroying many SMEs that manage to exist in Colombia due to the ICA discount, which is also being eliminated, and that is going to cause very serious problems.

There are other issues that we mention, such as the incentives granted to Colombian agriculture, issues related to companies that are going to see the impossibility of continuing to generate employment in the wealth, income and profit taxes, and a sector such as hydrocarbons, who is told to continue mining but not to export, and if he does not export to whom is the mineral going to be sold, and that ends up generating a very great difficulty.

Minister Ocampo has invited the congressmen to contribute other ideas, what are the proposals of Radical Change?

The Minister of Finance has never had the obligation or responsibility to oversee, this reform is not proposing a shock plan for the $80 billion of evasion and smuggling and we need a commitment from the Government to make it a reality, if that were a real goal, hardly any tax reforms would be needed.

Secondly, where is the state savings that was President Petro’s banner during the campaign? And thirdly, the most delicate thing is that a tax reform is being processed without knowing its designation. Where the approval of the Budget or the National Development Plan is contemplated, it is not. It is the desire to process it to show a political victory.

At the head of Dr. Germán Vargas we presented these alternatives not once, but twice, but they have not been taken into account by the minister.

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