Colombia’s national government hopes to create 2.5 million job placements and formalize the jobs of half a million Colombians by offering tax breaks to employers, the country’s Social Welfare minister, Mauricio Santamaria announced.
The government of President Juan Manuel Santos hopes to lower the unemployment rate to 8% from the official 11.6% rate in June.
The tax breaks will mostly be granted to companies with less than 50 employees, where informal labor is most common. Small businesses who hire employees under the age of 25 and at the same time increase the value of the payroll will be able to deduct paid income tax.
At the same time, the government said it would implement measures to prevent employers firing employees and hiring new ones in order to get the tax breaks.
Santos called the government’s measures “ambitious, but possible” and said that a long term solution to the country’s high unemployment rate would take years. “There is certainly no magic solutions,” the president said.
According to the latest official figures, Colombia counts 2.52 million unemployed, and has one of the highest unemployment rates in the region despite a growing economy.