The Ministry of Finance has ready a draft decree that seeks to repeal the last Day without VAT of 2022 that was planned for next December 2. The regulations will be open for comment until November 24.
“It is not advisable to keep the last day without VAT of the year, scheduled for the beginning of December. Not only are we less than fifteen days away from their realization, which implies considerable administrative and preparation costs, but to date it is not clear if these tax holidays are a tool that is justified in terms of their greater benefits compared to their possible costs”, can be read in the project.
Likewise, the letter indicates that the Sub-Directorate of Economic Studies of the Special Administrative Unit Directorate of National Taxes and Customs (Dian), by communication dated November 16, 2022explained the reasons why it is inappropriate to carry out this last day without VAT.
The reasons to eliminate the day without VAT
The government states that the balance of the eight days without VAT of the last 3 years is “ambiguous”. It should be remembered that this day was created during the government of Iván Duque for the economic reactivation of the country after the crisis generated by the covid-19 pandemic.
Of the three conferences that were held in 2020, beyond the 15 billion in sales, covid infections and little logistical planning are remembered, excusable in the lack of preparation before the novelty of the initiativesays the draft decree.
Likewise, during the three days of 2021, which took place in the second half of the year, around 31.4 billion pesos were soldand in the two that were carried out this year, which coincided with the eve of the elections, sales amounted to 19.7 billion.
The project states that the increase in sales these days would be related to other types of instruments that come from merchants to stimulate activity by taking advantage of the announcement of the tax subsidy.
“In other words: the tax holiday is used to offer promotions and discounts that ultimately end up explaining the higher values in sales, and that could have been implemented without the need to waive VAT collection.”, it is emphasized.
They also ensure that although the collection of national taxes has shown a good behavior in 2022, it is not advisable give up the income that by concept of VAT can be generated on the day stipulated as a tax holiday.
The above because the context for next year is not the best in economic terms and that it is not known if, given the boom period that seems to be ending, the fiscal cost exceeds by several orders of magnitude that previously calculated or additional price rises are fueled, due to the volume of sales, which affect the already high inflation.
TIME
