What is Luis Pérez’s proposal to lower VAT from 19% to 6%?

Recently, the former governor of Antioquia and former mayor of Medellín, Luis Pérez, made controversial proposals to solve certain economic challenges in the country. One of them is to lower the Value Added Tax (VAT) from 19% to 6%.

(Read: Benefits established in the tax reform end).

According to the candidate, in the first 100 days of his Government he would make this reduction in the tax to lower the cost of living for people.

Pérez also proposed removing several of the exemptions from this tax that, according to him, remain in large companies. In Colombia, the law establishes certain exempt goods, with 0% tax, and for producers with the possibility of a 19% refund.

Along with this, the candidate assured that in Colombia the problems cannot be solved with more subsidies. “The irresponsible management of the economy in the country has resulted in an unproductive government, it is our time to revolutionize the economy so as not to depend only on taxes“, he wrote on his social networks.

(What’s more: 42% of citizens are open to more taxes).

Another of his proposals is to generate more than 5 million jobs through a “neobank” that will be financed with one billion pesos to lend to entrepreneurs.

Now, the Dian establishes that the gross VAT collection in 2021 was $38.3 billion of weights. This has been a broad topic of discussion since there are several proposals to improve VAT collection.

Experts have assured that although it is possible to reduce VAT by 13 points as Pérez proposes, it is really not very feasible.

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