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Wednesday, May 05, 2021

President Duque withdraws controversial tax reform bill that sparked protests in Colombia

President Duque withdraws controversial tax reform bill that sparked protests in Colombia

The tax reform bill presented to Congress on April 15, triggered social protests and disorders in the last 4 days in Colombia.
Colombian President Iván Duque announced this Sunday the withdrawal of the tax reform bill presented to Congress on April 15, which triggered the social protests and disorders of the last four days in the country.

"I ask the Congress of the Republic to withdraw the project filed by the Ministry of Finance and urgently process a new project as a result of consensus and thus avoid financial uncertainty," Duque said in a statement at the Casa de Nariño, headquarters of the government.

The decision of the head of state comes after the massive four-day protests against that initiative left at least five people dead, although different social organizations denounce that there are more.

Duque explained that he spoke with the different political parties, production unions and other sectors of the population and that the new tax reform project that will be presented to Congress will include the proposals that came out of those dialogues.

In that direction, he indicated that the project will incorporate a temporary income surcharge to companies, extend the wealth tax temporarily, increase the tax on dividends temporarily and create an income surcharge for people with higher incomes, among others.

"The reform is not a whim. The reform is a necessity. To withdraw it or not, was not the discussion. The real discussion is to be able to guarantee the continuity of social programs," he said.

Among these, he mentioned the extension of the Solidarity Income, which today benefits more than 3.4 million households and offers free university education to young university students from the lowest social strata.

Duque emphasized that it also seeks to extend the payroll subsidy through the Formal Employment Support Program (PAEF), which "has benefited about 3.5 million workers.

He also said that they should continue to seek that the Value Added Tax (VAT) can be returned to "the most vulnerable households."

The original proposal included broadening the tax base to include those who earn the least among those who pay taxes and taxing middle and upper class public services with VAT of 19%, among other measures that were the trigger for the protests. in all the country.

In Bogotá and mainly in Cali, the demonstrations ended in vandalism against public transport, banks and shops, and even against ambulances.

"The path of a consensus clears perceptions and allows us to say clearly that there will be no increase in VAT for goods and services nor will the existing rules be changed. It is also clear that no one who does not pay income tax will pay that tax," he stressed today.
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