A recently proposed tax reform in Colombia that includes a controversial wealth tax received approval by the International Monetary Fund.
Mauricio Cardenas, Colombia’s minister of finance, attended a regional IMF’s conference in Santiago in which policymakers and stakeholders from Latin America and the Caribbean discussed possible remedies to support growth and financial stability in the entire region.
During a meeting between Cardenas and IMF chief Christine Lagarde, the latter remarked that Colombia has been characterized by implementing politics that guarantee the sustainability and economic growth, under a complex international environment.
The director also highlighted Colombia’s compromise with achieving its goals in fiscal finances and backed its controversial tax reform to be implemented in January 2015, according to the ministry of finances.
This support, enhances the governmental efforts to gain followers to get the approval of the tax reform; last week, Cardenas meet with several representatives of business associations in order to negotiate the contents of the ‘tax reform’. However, Francisco Lloreda, director of the Colombian Association of Petroleum said to Radio Caracol that until now there aren’t any modifications to the original proposal.
At an interview with El Tiempo newspaper, Alejandro Werner IMF’s director for western hemisphere, summarized its reasons for support the tax reform.
According to Werner, as oil prices and traditional incomes remain unstable, it is responsible that Colombia ensures its funding through a tax reform.
This initiative is in compliance of “the fiscal rule,” adopted by Colombia to control the excess of expenditures even in periods of high incomes. These incomes can be saved for seasons of low incomes to cover crisis.
The final decision on the approval of the so-called tax reform, will be taken next week in the national congress.
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