Following weekend consultations with political leaders in the wake of nationwide protests that lasted three days, president Duque finally came to terms with the fact that Minister Carrasquilla’s explosively unpopular attempt at widening both the VAT and the personal income tax base has to be scrapped.
A new approach to levying direly needed resources for 2023 through additional (and temporary) contributions from corporations and high-income earners (to be surely complemented by asset sales -51% of ISA and 8.5% of Ecopetrol-) seems to have the support of key political players.
However, instead of amending the bill already submitted, which could have been a possible way out of this impasse, President Duque has instead been cornered into publicly accepting that presenting the MinFin’s bill, even though well-designed from a technical standpoint, has been a monumental political blunder and miscalculation.
It is, as of yet, unclear which political parties will make up the coalition supporting the new bill in Congress. Centro Democrático, the Conservative Party and Cambio Radical look like clear backers, but the endorsement from La U and the Liberal Party, that would ensure the new bill a safe passage in Congress, is not yet a given.
It was quite telling that during the Sunday morning presidential address, in which Duque appeared surrounded by the Vicepresident and key cabinet ministers, Minister Carrasquilla was not present. In his stead was one of his deputies, but not by the president’s side but in the back of the room.
As Mr. Duque enters the final stretch of his administration with low levels of popularity, bound to go even lower in...
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