Despite being an unpopular measure, the proposal to extend VAT to most of the family basket products to increase public revenue is not exclusively for finance minister Alberto Carrasquille, who already ran this economic portfolio between June 2003 and February 2007 in the administration of former President Alvaro Uribe Vélez.
In fact, before the arrival, a representative of the Roberto Junguito Bonnet, head of the treasury department, Roberto Junguito Bonnet (August 2002-May 2003) tried to pursue a similar initiative without much luck. He planned to charge a 2% VAT rate on the basket's assets, which was subsequently declared unconstitutional by the court.
"All the finance ministers have tried to do what Carrasquilla is doing to expand the VAT-related products (…). At that time, caution was not accepted in order to create a scheme to protect people with less income. So the Constitutional Court went through , "Admitted Junguito in an interview with El Tiempo.
But the idea of charging VAT on more than 80% of the products in the basket, including those currently excluded or excluded, such as eggs, milk, meat, rice or fruit, is supported by other former ministers who had the opportunity to manage a treasury portfolio in the governments of César Gaviria (1990-1994), Ernest Samper (1994-1998), Uribe (2002-2010) and Juan Manuel Santos (2010-2018).
This is the case of Rudolf Hommes (August 1990 – July 1994) or Guillermo Perry (August 1994 – June 1996), who support the idea of extending VAT on most basket products, even though they contradict the proposal submitted by the government.
On the one hand, Hommes said that basket taxation is technically necessary, although it has a very strong social impact. However, he assured that it would only be appropriate if an effective VAT refund mechanism for the most disadvantaged people could be established, which has not been implemented recently.
"People do not think they can be returned, but the way to do it has already been invented, which would be a savings bank card. The question is how long we can do to implement this technology because the state took it years to merge the Transmilenio card, "said Hommes.
Perry said that more products should be placed in the basket. However, he stated that it would not be logical for this to be so high and stated that it was not appropriate to reduce the general VAT rate from 19% to 18% in 2019 and 17% in 2020 in already taxed products. in this way
"This idea comes from time to time. The benefits of VAT exemptions are in the middle and upper classes." It is necessary to set an intermediate level, for example, 12% in products that do not pay VAT today, but I never imagined that Carrasquilla would hit them at speed 18%. In addition, goods already in possession of 19% VAT must keep and not reduce labor costs in the tax reform in 2016, "the former minister said.
On the contrary, former Minister of Finance Juan Camillo Restrepo has provided various media in recent days that he does not see the future at a tax rate of 18% in the future, which he does not believe that this law has a green light in the congress and that the middle class leaves a blow in a substantial pocket.
In the end, the outgoing Minister Mauricio Cárdenas (3 September 2012 – 7 August 2018) was one of the most cautious when it comes to deciding on the financial account that the government would have to take in order to finance $ 14 billion that are missing from the 2019 budget Asked by the LR, the former representative of this portfolio said he would wait for a decision. "Hopefully, because I understand that they will make some adjustments," he said.
The government will defend its plan
Although various political parties, including a government coalition like the Democratic Center, have opposed the idea of taxing 80 percent of the family basket, director Diana José Andrés Romero yesterday will continue to task Defense Plan A of the Finance Act.
And this is to tax around 80% of the basket products most of your project and allow them to collect only in 2019 some $ 11.3 billion. Recall that today only 53% of products are taxed at a general rate of 19%.
"The government has a plan A. We will continue with this proposal, but we will be ready to listen to other alternatives that we are discussing in the Congress. Each alternative will have to consider that we need $ 14 billion," said Romero at a media meeting.
Similarly, Director Dian argued that this proposal is working on tax justice and will help both formalize the economy and reduce tax evasion. "We are facing a winning proposal. This is the most fair way to collect funds that the state needs," he said.
After testing the first ninety days of the government, President Ivan Duque announced that he would send a saving plate today to all institutions of the executive committee and present a detailed program of his administration in this matter.
In addition, he pointed out that, together with the Ministry of Finance and the National Planning Department (DNP), he will work to achieve savings of USD 6 or 7 billion in the next three years and that it is planned that next year's savings will be 1 , 2 trillion dollars.
"We will strive for the transparency and efficiency of the administration, the elimination of parallel payroll and the more transparent policy of travel, commissions and security schemes of the executive branch," he said.