The Solidarity Income would be underfunded, says the Petro team

(CNN Spanish) — The resources for the Solidarity Income in Colombia are not contemplated in the budget corresponding to 2023 presented by the Government of Iván Duque, warned Gustavo Petro’s joint team, emphasizing the need to approve the tax reform so that programs can continue to be financed. social like this.

“We have the will to maintain conditional and unconditional monetary transfers to overcome poverty, but as they leave us the budget project, then this program would be underfunded,” said Daniel Rojas, coordinator of President Gustavo Petro’s splicing team. , during the presentation of your final report a few days after the inauguration of Petro as president of Colombia.

Solidarity Income is a program that was created in 2020, within the framework of the covid-19 pandemic, which establishes monetary transfers for families with limited economic resources. In July of this year, more than four million Colombians began to receive a new round of these economic supports.

Duque had said last week that his administration would leave “the guaranteed budget for next 2023. We want that social policy to continue in our country.”

How could the Petro Government maintain Solidarity Income?

Rojas explained that since the resources for this program “disappeared”, the incoming administration has two ways: collect them through the tax reform or modify the transfer scheme.

“We hope that we can make an agreement (…) with the various political forces that make up the Congress of the Republic to give the country the best tax reform and not defund any social program,” he said in this regard.

The coordinator stated that the country’s fiscal reality is of “great concern” for the team and described the level of indebtedness and deficit as “critical.” Therefore, in his words, increasing collection is an “imperative.”

In his explanation of the importance of the tax reform —which could be presented to Congress as soon as August 7, the day of Petro’s inauguration—, he pointed out that Colombia’s collection is below the average for Latin America and the countries of the Organization for Economic Cooperation and Development (OECD).

In 2020, according to an OECD study which is made up of about 40 countries, Colombia was considerably below the average in terms of collection. The average of these countries was tax revenues that represented 33.5% of GDP, while in Colombia the percentage rose to 18.7%.

Above Colombia and below that average were 17 countries in Latin America and the Caribbean, including three of the largest economies in the region: Brazil, Argentina and Chile. Mexico, which together with Colombia would complete the five largest, were then two steps below.

The objective of the Petro reform, which has been at the center of the campaign, is to obtain 50 billion pesos (about US$11.3 billion). To achieve this, according to Luis Carlos Reyes, whom he appointed as head of the National Tax and Customs Directorate, the key is in a system where those who have more income progressively pay more, tax benefits are eliminated and there is a fight against evasion, he recently told Reuters.