Colombia’s 2015 budget is facing strong criticism from opposition parties from both the left and the right as Congress is divided on how to close the $6.5 gap in the proposed $108 billion budget.
When ministers from a range of government agencies presented their 2015 spending and investment plans before the Senate on Tuesday, some prominent congressional leaders expressed significant concerns over the ways in which those funds would be accrued and how to fill the deficit between the government’s tax and royalty revenue, and spending.
Colombia’s 2015 budget proposal
While the budget currently stands at about $108 billion, $6 billion –roughly the amount dedicated to “post conflict financing and related projects” — is currently unaccounted for in government revenue for the coming year.
MORE: Tax Hikes Could Fund Infastructure, Peace Measures: Colombia Govt
This has raised serious concerns from a variety of senators, who see the government’s plan to bridge the gap by raising taxes on an estimated 90,000 of the richest Colombians making more than $388,000 and extending those on financial transactions as domestically – and politically – damaging.
MORE: Proposed 4-Year Tax Hike Won’t Cover Colombia’s $6.5B Budget Gap: Report
Senator Juan Carlos Restrepo from the coalition Radical Change party proposed lifting the tax exemption of cooperatives, NGOs and foundations; Senator Julio Miguel Guerra, from Citizens’ Option, proposed new income from adjusting the taxation of multinationals and increasing in the Value Added Tax; and Senator Antonio Navarro Wolf from the progressive Green Alliance wanted to establish more effective controls on government entities for savings and reduced spending, such as not investing state money in advertising, where spending is currently “onerous”.
The government’s proposed “patrimony tax” has four rates: 0.25% for income higher than $500,000; 0.35% for those between $100,000 and $150,000; 0.75% for the range of $150,000 to $250,000, and 1.5% to over $250,000.
But it wasn’t just revenue streams that worried congress – many also believe that the government isn’t investing enough in firmly establishing a lasting peace with its still powerful rebel groups.
Senator Roy Barreras raised concerns that the demobilization process “as envisioned” would have to be next year due to the failure of peace process allocations in the budget.
“We need to fund the Havana agreements, all 5 of them, which would mean achieving and delivering peace. But we also have to finance the post-conflict, which means attending to the 15 million Colombians who have been living in conflict zones for decades. We just don’t see these priorities in the budget,” he said in an interview with El Pais.
In a response to Barreras, Finance Minister Mauricio Cardenas proposed to increase government investment from $23 billion to $24 billion. However, the minister said he could only do this while cutting spending elsewhere in the budget.
MORE: Crunching the numbers on Colombia’s 2015 budget
Sources
- Minhacienda no descarta incremento del presupuesto en 2015 (Caracol Radio)
- Congreso espera más propuestas de impuestos del Gobierno (El Tiempo)
- Este miércoles Comisones económicas aprobarían monto del Presupuesto General (Congreso de la Republica)
- Primera prueba de fuego para el Presupuesto 2015 (Dinero)
- Congresistas pidieron al Gobierno más recursos para financiar la paz (El Pais)