Portfolio spoke with experts about the positive, negative and problematic elements that the tax reform project filed by the Ministry of Finance this week before Congress.
(Read: Reform to the Presidency: the charges that disappear or merge).
These are the points that some highlighted:
Among the positive points, for example, Leopoldo Fergusson, director of the Center for Economic Development Studies (Cede) of the Andes and professor at the faculty, highlights that “The political opportunity that the Government has, which has never hidden its interest in carrying out a reform, has been used, which gives transparency and legitimacy to the initiative.”.
The academic also highlights that, for the sake of a “fairer and more efficient” statute, It begins by asking for a higher contribution from sectors of society that today have privileges over others.
This is agreed by Jairo Higuita Naranjo, founding partner of Jiménez, Higuita, Rodríguez y Asociados, who highlights as “good” that the project focuses on taxing “people with higher incomes, especially natural persons.” Also, qualified as positive the modification in the pension income exemptionWell, he said that this is quite high.
There are also opinions that see as positive “that dividends and occasional profits have a symmetrical treatment as labor and capital income do”, as mentioned by Oliver Pardo, director of the Fiscal Observatory of the Javeriana University. Despite this, Pardo assures that this “would be fantastic, as long as the general rental rate for legal entities is reduced.” The academic was clear that “some things can be good or bad depending on how you look at it, but everything is connected in a reform and has different effects.”
Jorge Espitia, a professor at the National University and a researcher at the Tax Policy Thought Center, believes, on the contrary, that something positive about the articles is that “recognize a tax on mining and energy exports, which generate externalities to the environment.”
In the case of the “bad” aspects of the project, the level of tax burden that the project will assume stands out. corporate industry. Higuita points out how “the bad thing is that the employer is punished, since it taxes dividends adding all the general income, which can lead to an income tax rate being paid between the company and the partner close to 60%”.
(Read: Ecopetrol’s formula to reduce the proposed tax on crude oil).
And in the case of the financial sector, the lawyer questions the rate of 3 additional points. “It is bad because it cannot be that there is a differential rate for only one sector,” he says, and also mentions the case of taxes on extraordinary exports from the mining sector, “although this sector is taxed for being highly productive, it is not taxes are imposed on other sectors that are also productive,” he says.
Along the same lines, Fergusson assures that the reform proposal as it stands today “is costly for some business sectors, the other side of the coin of a commitment to reduce unjustified exemptions in some business sectors should be to reduce the general rate, but not changes are proposed in that line, and the tax statute has a very high burden”.
Espitia assured, on the other hand, that a negative element, “and with which one must be very careful”, is the income base from which the income tax will be collected.
“This means that a family that has a single person income of $10 million can be considered rich, but if that person has five other dependents, that is, each member has an income of less than $2 million, the reform would punish more to a household with a single income than to another where more than one person receives income below $10 million”, questions the academic.
Some points of the tax reform project are not entirely good but they are not bad either, they are ambiguous, unclear, problematic, or even ugly. Espitia questions the messages regarding the management of the effective tax rate for companies. “He is neither so ugly, nor so bad, but you do have to be very careful, it is not clear how that is going to be handled,” she says.
(Also: Tax reform would reinforce measures against tax evasion).
The way in which the reform has been chosen to communicate is an issue that also worries Fergusson, at least, he says, in the issue of contributions to people, and it has to do with the observation that Espitia also raised as negative.
“There is a distinction that is not adequate, everything is raised in very disjunctive terms between those who have enough to pay taxes and those who do not. Around, if you earn more or less than $10 million you should contribute now, but if you earn less, don’t worry, and a discussion of whether this is enough to be rich or not easily stems from there, when the most appropriate point it would be to speak of a fair reform that asks more of the sectors with greater payment capacity”, says the director of Cede.
From the Fiscal Observatory of the Javeriana University, Pardo also points out the importance of “not looking at who wins and who loses, but how much they win and how much they lose”, as in the case of sugary drinkswhose new tax would have a punctual impact on poor households, which may not have the same weight for someone with high incomes.
The expert also indicates how the reform has a gap in relation to preferential VAT treatment. “There is a potential of $50 billion according to the commission of experts in tax benefits that can be taken advantage of and that this reform does not touch at all.”
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