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News > Latin America

Colombia: Vat on Food to Affect Vulnerable Families

  • Colombia: VAT on food to affect vulnerable families

    Colombia: VAT on food to affect vulnerable families | Photo: Telesur

Published 31 October 2018

Ivan Duque's administration sent a bill to Congress today aimed at extending the Value Added Tax (VAT) to most items in the basic basket of goods.

The ‘Financing bill’, which includes increasing the tax on basic food products, is being criticized for its possible effects on the most vulnerable Colombian families.

Colombia's Duque Expands Taxes to Lower Classes, Breaking Campaign Promise

The President of the Farmers Society of Colombia (SAV) Jorge Bedoya lamented the decision taken by the government, which proposes a 19% VAT (Tax) to the family basket.

'The announcement by the government of Ivan Duque of a new VAT will fall directly on the consumption of Colombians and will force them to cut down their expenses,' Bedoya said and indicated that 'obviously there are products that are excluded. In the particular case of meats and eggs, which are exempt from the value-added tax, because putting a 19-percent tax means raising their price by 19 percent.'

'If approved by Congress', Bedoya said, 'the Financing Bill would affect low-income children and poor peoples’ nutrition.'

Through social networks, the leader of the Colombia Humana movement, Gustavo Petro, said that Colombia will become the world’s most unequal country if its society does not mobilize against the application of VAT to the basic basket.

And this is likely to happen because the Duque administration is proposing to tax the family basket and, simultaneously, to reduce taxes for business.

Up to now, products such as rice, bread, potatoes, vegetables, fruits, beef, pork, chicken, eggs, cheese, and milk are not taxed in Colombia. However, those goods would be burdened with VAT once the Financing Bill gets approved.

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