The implications that VAT would have on the whole family person – Personal Finance – Economy

Experts explain what happened to Ivan Duque's campaign proposals about not raising taxes.

Family basket in Colombia

Carrasquilla raised the possibility to charge VAT to all products of the family person.


Daniel Bustamante / Archive EL TIEMPO


August 24, 2018, 11:53 am

The Minister of Finance, Alberto Carrasquilla, assured himself this Thursday the government would examine the possibility of registering the VAT with all products of the family person.

He assured that this money would be returned to the poorest families through social programs such as Familias and Acción or Sisben. This would be included in the next tax reform that would be presented in the coming weeks.

Economist Luis Carlos Reyes says it's important to keep in mind that VAT is a regressive & # 39; tax. That is, it takes a smaller percentage if the income is higher. This type of tax affects, to a greater extent, those with lower incomes.

family basket

Alfonso Miranda says that "taxes such as VAT are generally more unjust than progressive taxes such as income."


Archive / TIME

The economist says that if the VAT is set for the whole family, compensatory measures will be necessary in order not to get away from the idea of ​​looking for progressive taxes and that "before the government goes on, it must tell the country what these concrete measures will be".

Alfonso Miranda, director of the Department of Economic Law at the University of Javeriana, assures that taxes of this type "make life more difficult for those who earn less. Taxes such as VAT are usually more unfair than progressive taxes such as income taxbut for the state they are easier to collect ".

"This kind of tax makes life harder for those who earn less."

However, experts agree that taxes could provide the state with the necessary public funds.

What happened to Duque's proposals?

Reyes remembers that despite the fact that he made sure during the Iván Duque campaign that there would be a policy to reduce taxesit was never explained to the electorate what the logistics would be.

"What we are seeing are proposals to increase the taxes of the people with the lowest income and lower those of the companies," he says.

As far as Ivan Duque's campaign promise is concerned, to delete VAT for a few days a year, Alfonso Miranda says that measures like these are not necessarily in conflict with what is being proposed, for while an idea would try to stimulate consumption, the other would increase public funds.


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