Colombia’s finance minister has moved away from the defeat of tax reform

Colombia’s finance minister resigned on Monday after the government was forced to withdraw a highly unpopular tax reform bill that sparked six days of street protests that killed one person.

Alberto Carascuila said he was resigning to allow the government to reach a consensus on how to push for a tax reform package through Congress. President Ivan Duck Dr. Carascuila will be replaced by Commerce Minister Jose Manuel Restrepo Abondano.

The tax reform bill, introduced by the former finance minister in the Colombian Congress last month, was introduced by the government. It aimed to increase GDP by 1.4 percent, or ১ 4.1 billion, by extending tax exemptions and tax exemptions, among other measures.

In a matter of days, however, even parties that were expected to support the tax code changes have scrapped them. The Duke’s right-wing Democratic Center Party called on the president and his finance minister to remove the bill.

Last Wednesday, thousands of people went there Road to protest. The size of the protest surprised the Colombian government and encouraged the organizers, who extended it by a few days. The protests have become increasingly violent and the government has deployed troops in several cities to regain control.

The state local office said on Monday that 117 people, including a police officer, had been killed and 666 injured, including 306 civilians. The defense minister claimed that leftist guerrilla groups had “premeditated, organized and financed” the violence.

Alberto Carascuila says he is stepping down as finance minister to help the Colombian government reach a reduction in tax reform sens Bloomberg

The Duke said on Sunday that his government would present an alternative tariff bill to Congress and gave some indications of what measures it could take.

These include corporate tax surcharges and temporary measures such as Colombian wealth and dividend taxes, as well as additional cost reductions. A plan to increase value added tax on goods and services will be scrapped.

“The new bill will now be fleeting in nature. . . Citibank analysts wrote that the indications of a country committed to coordination are now weak. “This will negatively weigh the rating agency’s decision.”

The Tax reform This year is the most important part of Colombian law. The investment-grade status of the country depends on it.

Both Fitch and Standard & Poor’s have rated Columbia Triple B minus with a negative outlook for long-term debt. It ranks Moody’s Colombia Baa2 one decimal ch more than the investment-or waste status, above the two.

If tax reform efforts fail or fade, Colombia will be thrown into a small group of investment-grade Latin American countries, including Mexico, Chile and Peru.

It would be a blow to a country that does that nonetheless Long civil conflict And long-term lawlessness, which has made itself financially proud. In stark contrast to most of the nations in the region, Colombia has not defaulted on debt since the 1930s and has received investment-grade status since 2011.

While the repeal of the tax bill and the resignation of Caraskiller could ease tensions, protesters vowed to return to the streets on Wednesday.

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