Protests in Colombia derail an important tax reform

The unpopular bill was going to be the president’s big legacy | The Americas

5/4/2021 9:51:00 AM

Iván Duque’s tax reform was sorely needed. His government needs more revenue

The unpopular bill was going to be the president’s big legacy | The Americas

FOR THE past week protesters have defied an 8pm curfew, and the risk of catching covid-19, to take to the streets of Bogotá, Colombia’s capital. They have burned buses and police stations and looted banks and shops. One of the main roads leading to Cali, the country’s third-largest city, has been blocked, resulting in empty shelves at grocery shops. Even Medellín, where protests rarely happen, has been affected by looting. At least six people have died and nearly 400 civilians and police officers have been injured. On May 1st Iván Duque, the president, deployed the army to quell the violence.

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The protests were triggered by a tax-reform bill the government sent to Congress on April 15th. On May 2nd the protesters seemed to achieve their aim: Mr Duque withdrew the unpopular bill. The next day the finance minister, Alberto Carrasquilla, resigned. But resentment at the president, who currently has approval ratings of 33%, means that unrest is likely to continue. More protests are due for May 5th.

Mr Duque’s reform was sorely needed. His government needs more revenue. Because of the pandemic, Colombia’s deficit has tripled to nearly 8% of GDP. Public debt could reach 108% of GDP in ten years. The reform would haveremoved many VAT exemptionsand reduced the threshold for starting to pay income tax, from which revenues are among the lowest, as a share of GDP, in the OECD, a club of mostly rich countries. Pensions would have been taxed, too. Spending on social programmes would have increased, potentially benefiting 19m people. Mr Carrasquilla claimed the bill could have reduced the share of Colombians who are extremely poor (anyone who earns less than 145,004 pesos a month, or $38) by six percentage points.

Most Colombians, however, saw it as unfair. One of the longest lockdowns in the world has emptied wallets and sapped morale. Since last year 2.8m people have fallen into extreme poverty. More than 500,000 businesses have closed. Even though the tax increases would have hit the wealthiest hardest, many feel that it is not the right time to raise taxes. Fully 80% opposed the bill.

The bill was not the protesters’ only grievance. Colombians are frustrated, particularly with Mr Duque. The president promised to make the country safer. But violence is getting worse. Colombia is exporting record amounts of cocaine—it still provides around 70% of the world’s supply. Meanwhile illegal armed groups are growing stronger. Since 2016, the year a peace deal was signed with the FARC guerrillas, the remaining groups have driven a growing number of rural Colombians out of their homes and murdered hundreds of social leaders. Colombians, like many people elsewhere, also blame their government for mishandling the pandemic, which is rampaging through the country. Just 7% of the population have had a first jab of the vaccine.

Mr Duque is weak politically—unlike his predecessors, he does not have a stable majority coalition in Congress. Even his mentor, former president Alvaro Uribe, has distanced himself from Mr Duque; he was one of the first to speak against the bill. The president has surrounded himself with yes-men, which helps explain why he seems out of touch with many Colombians. Indeed, since the protests started he has given the impression that he hadn’t even read the bill. He seemed surprised to learn about some of its VAT measures and left Mr Carrasquilla and another minister to defend the reform.

Read more: The Economist »

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ForaBolsonaroGenocida Do not misinform the world, this strike is not about tax reform, it is only about Marxist movements that want to deteriorate the country's economy and discredit our government and our democracy. What happened at the protests? The tax reform was going to take money from middle class to give it to the poorest, but leaving untouched the wealthiest. That's why Colombia is one of the most unequal countries around the world.

Important tax reform lmao yeah ok And sadly it provides Petro more ammo when he campaigns for president. God save Colombia if he becomes President! It will go the way of Venezuela! He’s so weak politically that the only way he now has for have any kind of “control” over the situation is -literally- allowing police and military forces the use of lethal ammunition towards civilians. That’s our commander in chief.

SOSColombia Todos dicen querer la paz,pero le hacen la guerra a Colombia,utilizando las marchas.paro. Can we go somewhere today? When will it be time for the wealthiest among us to pay their damn share?

This is extremely biased and misleading. Do better. SOSCOLOMBIA KENNEDYS MARTIN LUTHER KING MALCOLM X KENT STATE 4 HIROSHIMA NAKASAKI FUKUSHIMA RACIST VATICAN IMMACULATE CONCEPTION NO MORE 1453 BITCH SLAPPING us IN SLAVE MINERAL OIL GAS EXTRACTION TERRITORIES 220 FEET SEA LEVEL RISE END OF 2023 ? The wealthy will make good use of money and create chaos/havoc rather then give tax money to the govt.

Wealthy propaganda, just like the US. The rich own the news papers and media and spew the unchristian talking points. Fair share demands much from the well off...not just charity but a responsibility These protests are only excuses to destabilize the country, create chaos and thus weaken democracy and the public forces.

They wouldn’t hit the wealthiest hardest, most of us know we need a tax reform just not that tax reform proposed by a government who doesn’t even want to try austerity on their own expenses. Read the room 🙃🙃🙃🙃 Did you even informed yourselves? Why tf would the middle and lower class riot for the wealthiest?

who cares what you think? The true about these protests here 👇🏻 Am going live on the protest situation here in Colombia. by StuartOswald

This is bullshit. What it need is for the government to stop being corrupt, tax the financial industry more, let the mining industry work, and leave the citizens alone. This is one of the most taxed countries in the fucking world!!! Yes Assholes, but not only from the pockets of the poors , your loved bankers and ultra wealthy have to take the biggest part!!

Sometimes I wonder and why some people say they invested and didn't get profit, then you need to try Mr Bryan 💯✅ payout guaranteed I have made several withdrawals into my Bitcoin wallet earn_with_bryan its necessary to tax poor people an extra 19% Have you been to Colombia ever? Are you aware of the minimum wages in Colombia? Are you aware of the rampant corruption? Maybe you think we, in Colombia, have the same quality of live in Switzerland. People is protesting for the great life and opportunities available or everyone

The non colombians who wrote this Yes, Colombia needs more revenues. But we urgently need less CORRUPTION, definetelly different funds investment prioritisation,(including military airplanes), we demand humanity and solidarity. Colombia has been in crisis and not only because of the Pandemic. SOSColombiaDDHH

The revenue would be there if this country was not governed by corruption that sucks all, fuck off SOSColombiaDDHH SOSColombia ASÍ NO SEAN DE COLOMBIA, COPIEN Y PEGUEN ONU_es onucolombia ONU_derechos CIDH CNNEE cnnbrk ajplusespanol AP_Noticias Almagro_OEA2015 OEA_oficial bbcmundo AmnistiaOnline OEA_oficial Ayuda en estos momentos nos están masacrando, colombia clama ayuda

Your priorities are fucked. Shame on you.

JAIRO__martinez the hell is wrong with you? did u ever read about colombia status? about their people and problems? about tax benefits to a few? ContraGodarria SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH SOSColombiaDDHH

ContraGodarria 21 innocent civilians have been killed in the last few days, the Police is shooting unarmed protesters and the government is doing nothing to stop this massacre. Yes, we need a tax reform, but we don't need more taxes for the middle classes, we need equality and peace. We denounce that the corrupt government of Colombia is killing people who are against its far-right policies, help us, there are civilians killed by the army and the police SOSColombia

Don't worry Economist, Duque is making those protesters pay... In Colombia a systematic genocide is taking place against the entire protesting population. Please help us inform the world !!! Taxing basic foods, taxing basic services like electricity and water? That is NOT acceptable, taxing the poorest has never been the best choice. The richest have to be the ones taxed the most. Not the other way around. Stop romantizing a tax reform that was never good enough.