The proposal with which you are looking reform the General Participation System (SGP) It is in the crosshairs of economists due to the effect it could have on the country’s public finances. That is why, to allay fears, the Government and the project’s speakers agreed on a series of changes aimed at guaranteeing its viability.
(Read more: Raise transfers to 35% in 10 years, new proposal for the SGP reform)
The senator of the Green Alliance, Ariel Ávila (speaker of the initiative), the Minister of Finance, Ricardo Ávila, and the Minister of the Interior, Juan Fernando Cristo, participated in the working group. Seven agreements were derived from the discussion, including a modification in the percentage increase to the resources received by municipalities, districts and departments through the GSP.
The parties agreed that the increase in transfers will no longer be 46.5% of the Nation’s current income, but will be 39.5%, that is, seven percentage points less than the original proposal. The adjustment is based on the fact that the figure is not only a midpoint compared to the 37.5% that some congressmen requested, but also meets the objective of ensuring more resources for the regions.
Along these same lines, it was agreed to condition the “application of the formula that increases transfers to the issuance of the powers law”. Although this point was already established in the text of the presentation, will be done in a more express way to guarantee that the legislative act does not come into force if there is no law that defines the new functions that municipalities and departments must assume.
(Read more: Former Finance Ministers ask Congress to reconsider the SGP reform project)
Congress of the Republic
César Melgarejo / EL TIEMPO
(See: Reform of the General Participation System: implications beyond the economic)
As part of the agreements, it was also decided that the transition period will be extended by two years, so the increase It will no longer be done in 10 years, but in 12. In the same way, it was agreed that the process will begin when the powers law is issued and a period of six months was set for the Executive to present to Congress the project with which said norm would materialize.
While this happens, the agreement indicates that the current GSP formula will continue to apply, which establishes that the annual increase “It will be a percentage equal to the average of the percentage variation that the Current Income of the Nation has had during the previous four years, including that corresponding to the capacity of the budget in execution.”
The Government and the speakers also agreed that the initiative should make it clear that the increase in GSP transfers Its purpose is to close the gaps that the territories have historically had.. Likewise, an article must be included that makes this increase conditional on it being compatible with the Medium-Term Fiscal Framework.
(See: Taxes: how much Dian has returned in favor of Colombian taxpayers)
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