Sunday , August 1 2021

Funding Act for two years? | Finance economy

To the surprise of the analysts, the Funding Act presented by the government of Ivan Duke in the Congress of the Republic, which was the subject of many criticisms, debates and changes that initially proposed to tax almost the entire family of the Colombian family. does not provide estimates of its impact on collection, but for the years 2019 and 2020. Leaving 2021 and 2022 without data corresponding to the amount in peso or as a percentage of GDP.

Read: (In the long run, the Finance Act would contribute to the fiscal deficit).

So is the puzzlement Camilo Peres, Economic Research Manager at Banco de Bogotá, He said during the seminar "Structural challenges of the new administration Duque 2018-2022", organized by the economic research centers Anif and Fedesarrollo, which "What anxieties is that this reform is only intended for two years and that's why government data show only 2019 and 2020"

Read: (The proposal is to extend the VAT in the family basket)

although FEDESARROLLO he did not express it expressly, and also show his assessments a fiscal deficit for these years of 3.1 billion pesos for 2021 (-0.2% of GDP) and 5.0 billion pesos for 2022, negative from -0.4% of GDP, according to Luis Fernando Maya, a new CEO.

Also, Anif's accounts for 2020 will be -0.1% and -0.7% of GDP for 2022. According to Sergio Clavio, president of this last center, this is partly due to the fact that Dian's leadership, which will be of great importance to the government, leaves much to be desired and gives as an example that the profit from the collection is only 0.1% of GDP.

For Anif's head, this government falls into the same mistake of the previous one, trusting too much in Diane's role. And although the Funding Act contains a profound reform of the organization, such as duplication of officials, their better payout, their professionalisation, and the removal of the political element of appointment from subdivisions that do not produce results, which will not be seen in 2019 and later.

"We also do not have to reduce the corporate interest rate from 33% to 30% by 2022 because bankruptcy is going on," Clavier said.

Perez adds that these shortcomings are due to the fact that starting in 2021, what is collected by individuals will be returned to the companies, which will lead to a lack of fiscal sustainability.

On the other hand, Javier Ávila Mahecha and Jorge Armando Rodríguez, professors at the National University, also expressed their surprise when, in an analysis of the Funding Act, they assured The tradition of presenting assessments of the impact of the same over the entire management period is breaking this year.

According to the analysis "Taxes and deductions in the financing account" and published by under the heading "Long-term funding will contribute to the fiscal deficit", by 2021, according to the government's draft, will have a deficit of -6.9 trillion pesos (-0.6% of GDP), while by 2022 the fiscal deficit will be 9.4 trillion pesos (-0.7 of GDP).

"By 2021, the bill would have taken instead of adding tax receivables … In this way, the permanent net effect (of the first round) of the Finance Act would be negative, this would contribute to the deepening of the structural fiscal deficit that has long affected the national government, " researchers say.

We will have to wait a few days for the Duke's government with Minister Alberto Carasquila at the head of the paper to explain the reason why the figures for the two-year period 2021-2022 in his Financial Statements were not taken into account and that analysts in uncertainty .

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