After four days of national protests which sparked looting, bus-burning, and chaos in several cities, and left some 19 dead and hundreds wounded, Colombian President Ivan Duque announced on May 1 that he will withdraw his proposed tax reform bill – misnamed the “Sustainable Solidarity Act"—which triggered this explosion. The bill sought to raise some $6.4 billion in revenues, most of which—69%, to be precise—was to be channeled into paying down the national debt. Wall Street, the City of London, and the other financial parasites demanded such a bill, and viewed it as a test case for similar measures which they demand to pay off the mounds of fiscal debts taken on, due to the pandemic.
The bill sought to impose Schachtian looting upon a nation where 43% of the people now live in poverty (by notoriously low official calculations), with 2.8 million of those driven into extreme poverty in the pandemic period alone. Among its most regressive measures:
• lowering the threshold for payment of personal income tax to those earning $690 and up a month—literally half of the current level;
• eliminating existing exemptions from the 19% VAT tax on certain foods (meat, chicken, fish, milk, eggs, rice), on vitamins, antibiotics and other medicines, on scientific books, newspapers and magazines, and on public utilities for medium- and high-income housing;
• taxing funeral services (potentially a huge revenue source in the middle of a pandemic!);
• allowing provincial municipalities to impose tolls in their capital cities;
• adding greater carbon-emissions and other taxes on polluting cars.
After Duque’s announcement, London’s Economist complained that the bill was “sorely needed.” Rating agencies such as Fitch had threatened the government that passage of the tax reform would be required to reverse their intentions to further lower the ratings on Colombia’s sovereign debt, already at a low BBB. (A lowered rating by these Wall Street/City of London assets raises the cost of paying off the affected debt.)
President Duque accepted the resignation of his Finance Secretary, who had drawn up the bill, and said he would come up with a tax bill around which a consensus could be negotiated. But he insisted, “[T]he reform is not a whim. The reform is a necessity.” Not surprisingly, a new protest has been called for May 5, and some of the opposition say they will stay in the streets until the government falls altogether.
