Amid warnings of possible cuts to investment, the proposal to reduce the total amount by $12 billion and the alternative proposal that seeks to sink the financing law before it is born, the General Budget of the Nation project for 2025 entered the final stretch of its first stage in Congress, which has less than a week to approve the full amount of these spending accounts.
The situation in the Legislature is divided between those who recommend that the $523 billion requested by the Ministry of Finance be lowered to $511 billion, to avoid a financing law that many classify as inconvenient at this time of the economy and the calls from the Casa de Nariño to give it the green light, arguing that investment in the regions is at stake.
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In the lead-up to this week, a group of 30 congressmen submitted the formal proposal for reduction, which the president of Congress himself, Efraín Cepeda, explained as an alternative to not risk the fiscal stability of the Nation, to avoid unnecessary pressures during the process of approving the Budget and to guarantee that later on there will be a debate on the tax reform that the country needs.
They basically want it in this part of the Senate and the House.is that the accounts are endorsed without the part that depends on the financing law and that once the collection that this project can have is defined, the resources are added to the State accounts, thus avoiding what was already seen this year, when the budget had to be cut because the arbitration litigation of the Dian did not arrive.
Ricardo Bonilla, Minister of Finance and Public Credit
House of Representatives
Clear dates
Reviewing what was established in the Congress agenda for this week, the steps to follow in the process of approving the PGN have already been defined, which will have a lot of movement in the first half, since it is expected to leave everything ready to go into detail and review the projects, works and contracts on which the money of the Colombians will be spent.
In the schedule released by both chambers of the legislative branch, it was established that on Tuesday, September 10, another meeting of the joint committees of the Senate and the House of Representatives will be held to finish reviewing the entities and reach the final vote and on Wednesday, September 11, when it is expected to be decided whether or not the $523 billion they requested will be approved.
Currently, as explained by several tax authorities and research centers, the General Budget of the Nation has three major warnings regarding its collection capacity, since the Ministry of Finance points out that the management of the tax authority will translate into additional income of $16 billion for the Nation, a figure that for other experts would not exceed $6 billion.
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On the other hand, there is the gap in the fuel fund that will be raised at least $7 billion and the $12 billion that the Government acknowledged it needs and depends on a Financing Law or tax reform to be able to execute them. In this way, at least $29 billion would be needed next year, which for many should lead to talk of a cut in spending, while the Casa de Nariño is focusing on investment.
Take care of the investment
In line with what it has said during meetings with Congress to discuss the General Budget of the Nation, National Planning again spoke out on the budget items that would be affected by a possible cut in these accounts and told the country that the $12 billion that will come from the financing law will be used for investment in the regions.
Colombian pesos
The director of this entity, Alexander López Maya, highlighted that the budget The budget presented for 2025 reflects the national Government’s commitment to the sustainability of public finances, in strict compliance with the Fiscal Rule and all legal commitments of the State, so there are no doubts regarding its execution.
“Although the country is facing macroeconomic and fiscal restrictions that have limited the allocation of investment resources for the next period, this Government is committed to guaranteeing a minimum of resources so that Colombia can advance towards social justice and the protection of life, materializing the transformations outlined in the Government Program and the National Development Plan 2022-2026,” he said.
Thus, he explained that the additional resources of $12 billion considered in the budget are protected by article 347 of the Political Constitution, which authorizes the Government to process a Financing Law to address the projected expenses and that will allow financing a minimum of strategic investments that under another scenario would be underfunded, given the high inflexibility that currently exists in the budget programming process.
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“These rigidities are partly the result of decisions made by previous governments, such as the debt acquired with the International Monetary Fund, the Fuel Price Stabilization Fund (FEPC), future terms, pandemic debts pending payment to the Health System, the tariff option, among many others that increase the pressure on the 2025 budget,” added director López Maya.
Sources who have been part of the conversations between the Ministry of Finance and the congressmen of the economic commissions told Portafolio that on several occasions, the Government’s warning has been that in the event that the financing law is not implemented, the money that will be reviewed is the investment money.
“It is important to mention that, given this fiscal reality, the investment programming for 2025 required a general effort by the sectors towards prioritization and efficiency of spending, while ensuring compliance with the provisions of Article 350 of the Constitution, which establishes the prioritization of social spending over other items,” says the DNP statement.
Because of this, the Government concluded by stating that “reducing the amount of investment would go against the constitutional mandate of including in the budget all the expenses incurred by the National Government. In addition, it would compromise the prioritization of appropriations associated with social spending, aimed at meeting the basic needs of citizens.”
