The president of the economic studies center Anif, Mauricio Santamaría, launched a new alert on the fiscal situation facing the country in the framework of an event on ‘Tax reform and pensions’.
The director of Anif assured that given the situation of the exchange rate in recent months, part of the collection for next year expected by the tax reform approved in Congress this week, whose estimate amounts to around $20 billion, would be lost.
“The devaluation since June has been 29%. The calculations we have is that next year almost $3 billion of what the tax reform is going to collect will be eaten, which is more or less close to 15%. As of 2024, you can eat a little more, $4.5 billion, which is already a level close to 20% of the reform,” Santamaría assured.
The president of Anif described the situation as “unfortunate”, and assured that they do not foresee changes in the future unless the exchange rate begins to fall, a situation that does not appear in the panorama either. In addition, he emphasized that the depreciation of the peso is something that not only affects the national accounts, but also hits the pockets of Colombians and the cost of the basic food basket. “We estimate that 3.6 points of inflation will be due to devaluation alone,” he said.
“When every day a minister comes out and says something different, and they come out to say that oil is going to end, or that we have the worst health system in the world and we are going to end investment, the markets get scared. The markets are thousands of people in the world seeing what they invest their savings or deposits in, one of the most attractive investments is the debt issued by countries, and when investors get scared they start selling the debt that worries them, and that is what is happening in Colombia,” Santamaría said.
Faced with the reform, the economist assured that it is still necessary to wait for the final text that will result from the conciliation that the Senate and the House will carry out next week, and acknowledged that most of the changes will be felt by the companies in the energy mining sector and the people with higher incomes.
The change in the extractive sector was total compared to what was presented in principle. It is a very hard blow, the tax rate for companies in Colombia is already very high and if you look at prices in history, they would almost always have paid the highest surcharge,” said the Anif director.
Santamaría assured that in relation to the measure that will prevent the deductibility of royalties “it is difficult to say if it is good or bad. What is definitely bad was doing both things at the same time.” And he also said: “there were good things, like the change in dividends, but it seemed to me a serious mistake to have eliminated the issue of high pensions.”
The president of Anif also said that another difficulty facing the fiscal situation has to do with the pension system and the burden it represents on the State’s accounts.
“The payment of pensions that is in the budget is more than 4 points of GDP, what is in other entities such as the Teacher’s Fund, Fopep… They are $72.7 billion, almost 6 points of GDP, it is outrageous, not only because it is a lot of money, but because it shelters very few people,” said Santamaría.
According to Anif, the fiscal pressure is so great that the country allocated an amount close to VAT collection to pay pension allowances.
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