One of the chapters that has been most debated in the midst of the conversations about the future of the General Budget of the Nation is the need to cut the accounts presented by the Ministry of Finance to avoid a scenario of underfunding like the one experienced a few months ago, when $20 billion was cut from planned spending due to the cash crisis the country faced.
The shortfall of $12 billion, which the Higher Council of Fiscal Policy estimates as $24 billion and which the Government hopes to cover with a financing law, as well as the increase in operating expenses and the expectation of high revenue collection by the Dian; are some of the risks that generate alert for experts and study centers; who have requested that at least $30 billion be removed from the $523 billion planned.
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Despite the warnings, the Ministry of Finance has remained calm Regarding the planning of its expenses and income for 2025, arguing that the country’s economic dynamics are improving and that the desired pace will gradually be resumed, which will help improve areas such as consumption, increase tax collection and, with this, normalize the State’s coffers.
GDP
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Whether they like it or not
In a recent column published on his social media, former Finance Minister Juan Camilo Restrepo referred to this situation and assured that whether he likes it or not, the cut must be made, either through administrative means or through a reduction in spending during execution next year, since it has already been demonstrated that there is not that much money.
This budget expert also criticized that the budget project has been tied to a financing law, which in his opinion has not been studied, nor is it known for certain what the elements are. which will be addressed, so it is depending on a project that it is not known whether it will work or not.
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“All the denied information and the fuss about the content of the tax reform (financing law) stem from the fact that the Government, when it presented the underfunded budget for the 2025 period of $12 billion, had neither studied nor quantified the content of the initiative. It should have been presented simultaneously with the budget bill since July,” he began by saying.
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In this sense, he questioned the fact that everything is left “to the last minute, in the crudest improvisation,” while recalling that the management of economic projections cannot be handled in this way, since the macro stability of an entire nation and compliance with the fiscal rule are at stake.
“Instead of attacking the failing economy with a new reform now, “With regard to the tax burden (which will further accentuate the slow recovery), what the Government and Congress should do is correct the underfunding of the 2025 Budget in a timely manner, that is, on the spending side, cutting operating expenses by $12 billion from now on, which can be done perfectly,” Restrepo added.
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Juan Camilo Restrepo added that if this is not done now, sooner or later the adjustment will have to be made “during the execution in 2025, due to the stubborn truth of the country’s poor fiscal situation and the collapse of revenues, when it becomes evident that income is overestimated.”
In this context, the former Minister of Finance concluded by recalling that “operating expenses are growing at a nominal rate of close to 20%. There would then be plenty of room to cut expenses in time, without putting the country in the throes of a new tax reform.” which in his opinion is “useless and counterproductive.”
