00:00The coffee, fruit, and salt were more plentiful, and there were more health benefits for some employees.
00:06These are the key points of the bill that the government presented to Congress and how
00:10can impact your wallet.
00:12The government of Abelardo de la Espriella presented the Fiscal Adjustment Law to Congress.
00:17The project, known as the economic rescue plan, was presented last Thursday, October 29.
00:22in the Secretariat of the House of Representatives.
00:25According to Vice President José Manuel Restrepo, 70% of the project's fiscal adjustment will be achieved
00:31with greater efficiency in public spending and with a reduction in waste in the State.
00:36The remaining portion will come from taxes.
00:39VAT for more products
00:40One of the central points is that the text includes the elimination of exemptions for the
00:45VAT.
00:45This means that the government is proposing that the general rate of 19% be applied to
00:51some of the items that until now had a lower rate or were at 0%.
00:55Among other things, they are eliminating a good number of products from the basic food basket, such as
01:00They include coffee, almost all fruits, corn, honey, salt, cocoa, among others.
01:06Alcoholic beverages, such as beer and tobacco, will also see an increase.
01:11As well as inputs for agricultural production, such as fertilizers, machinery
01:16and seeds.
01:17Restrepo's explanation is that the VAT tax benefit for these products is for
01:21for the entire population, not just the poorest.
01:24Therefore, the vice president asserts that 19 million Colombians, the poorest,
01:29They will stop paying VAT because this tax will be refunded to them.
01:32The strategy will be called effective.
01:34According to the government, the refund will average 213,000 pesos per month.
01:39per household and up to a maximum of 288,000 pesos.
01:43It will be received by households with incomes up to 3.4 million.
01:47The government says that exceptions that currently benefit those who buy the most are coming to an end, without clarifying.
01:52Which products will no longer be exempt?
01:55The project establishes, among other things, that movie and show tickets, the
01:59online games of chance, mobile phone services for socioeconomic levels 1 to 3, and electric vehicles
02:05They will be subject to a 19% rate from the date the law is enacted.
02:09Many more exemptions would be eliminated by January 2028.
02:13International e-commerce platforms, such as Shane, Temu, and Amazon, will pay
02:18VAT regardless of the purchase amount.
02:21Currently there is an exclusion for purchases below $200.
02:25Less profit for companies.
02:27For businesses, the proposal includes a lower income tax, by lowering the general rate.
02:32of the companies to 33% in 2027 and to 31% from 2028.
02:39The "roar for investment" is a measure to encourage large investments in Colombia.
02:44and job creation, which, according to the Treasury, consists of a reduction in the income tax rate,
02:49with a rate of 20% for projects starting in 2027 or 2028 and 26% from 2029 onwards.
02:57There would be changes to the wealth tax starting in 2027.
03:01The threshold would rise from 72,000 to 95,500 VT and the tax would disappear from 2031.
03:09On the other hand, workers contribute more to the health system with the bill.
03:14Currently, an employee contributes 4% of their salary, but this would increase to 5% for those earning
03:20between 2 and 4 minimum wages and up to 8% for those who exceed the range.
03:25The self-employed are at 12.5% and their rate would be gradually increased, according to their income.
03:31up to a maximum of 15.5%.
03:34Less government
03:35The project seeks a more efficient and less costly state, in the words of the government.
03:40According to the Ministry of Finance, to achieve this the project plans to reduce the size of the
03:45State by 15% and cut spending on service provision contracts in half by 2027,
03:51which can then only increase with inflation.
03:53Furthermore, between 2027 and 2030, the amount the State buys in goods and services will not be allowed to grow.
04:00more than inflation.
04:01The government promises to save 44.6 trillion pesos in 2027 and 76.1 trillion in 2030.
04:09The law also gives the president extraordinary powers for six months to suppress
04:15and merge ministries and entities.
04:17What is the purpose of the Economic Rescue Law?
04:19The project's objective is to reduce the fiscal deficit.
04:23The gap is so large that for every three pesos of the nation's general budget, one peso
04:28According to the vice president, interest will be paid.
04:31The government of Abelardo de la Espriella promises that with the Economic Rescue Law it will save
04:36to save the country from bankruptcy and avoid a recession that would hit households and businesses.
04:40The government estimates that the law would improve the country's finances by 51 trillion.
04:46of pesos in 2027 and more than 122 trillion pesos in 2030.
04:51Without spending cuts, the fiscal deficit in 2027 would reach 9.4% of GDP.
