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Uribe Urges Careful Review of Colombia Fiscal Adjustment Bill

Uribe Urges Careful Review of Colombia Fiscal Adjustment Bill

Álvaro Uribe asked the Democratic Center to study with caution and respect toward the Executive the Fiscal Adjustment Bill of the Government of Abelardo de la…

--- The context --- Colombia is debating the Fiscal Adjustment Bill of the Government of Abelardo de la Espriella, which combines new levies, a reordering of the State and austerity. After its content became known, former president Álvaro Uribe Vélez asked the Democratic Center to study the proposal with caution before setting its position in Congress. --- The facts --- Uribe related that the president told him the situation of the country is very serious, but that the Government is open to listening to options that the caucus may propose. Under discussion is a tax on purchases below 200 dollars on commerce platforms, as well as changes to withholding at source and to the taxable base. The initiative provides that the social security contribution of employees would rise from 4% to 8% and that the full VAT rate of 19 % would apply to foods, liquors, prepaid medicine, computers and low range cell phones. It also proposes a state reduction of 15 %, the elimination of differential VAT rates from 2028 and refunds for vulnerable households. The bill includes a preferential regime called Ruge for investment. Uribe summoned the parliamentary caucus for Thursday, November 5, from 12:00 m., to analyze possible modifications, eliminations or additions to the project presented by the Government. --- The positions --- In statements to a radio station, Uribe held that one cannot react on the impulse of first impressions and that the principles of the party must be examined and how they fit with the needs of the country. On his profile on a social network he asked for a caucus study, with a calm attitude, and that required modifications be examined with the Government, with respect toward the Executive. Senator María Clara Posada expressed that she should not be counted on to increase taxes on the middle class, because that burden deprives citizens of their economic autonomy and their freedom. She recognized, at the same time, as positive the reduction of 20% in payroll spending, 50% in contractors, corporate income from 35% to 31% and non essential spending. --- What remains unknown --- The unified position of the caucus is not yet known. It is also not defined how vulnerable households will be protected if the broader levies advance, nor what reach the refunds provided will finally have. --- Unanswered questions --- How will it be guaranteed that raising the contribution from 4% to 8% does not reduce the income of lower paid workers? Which specific foods and products would be left with the full VAT rate of 19 % and by what criteria will that list be decided? Will the refunds for vulnerable households be enough to offset the higher cost of foods, computers and low range cell phones? --- EPM analysis --- The debate is institutional, within the right, between the fiscal urgency described by the Government and the need to protect the middle class. The path proposed by Uribe is not a rejection, but serious study and respectful dialogue with the Executive. 📌 EPM Take: In EPM's view, the prudence Uribe asks for protects the middle class without closing the door to the rescue of the economy that the Government seeks. The calm study must put first the impact on workers, vulnerable households and consumers of basic goods, with verifiable gradualness and real compensations before new general burdens. If the Executive maintains the openness that the president expressed to listen to options, Congress can improve the project, sustain austerity and prevent the adjustment from falling on those with the least margin today in Colombia.
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