Tax reform: the government filed the tax reform bill

On July 20, 2021 the Government filed before the Congress of the Republic the tax reform bill Social Investment.

On July 20, 2021, the national government filed, with an urgent message, the tax reform bill 2.0 called Social Investment.

The initiative presented before the Congress of the Republic seeks to raise 15.2 trillion pesos, benefiting 7.8 million Colombian households, which would receive resources to alleviate the impact of the economic crisis generated by COVID-19. In a short article, the proposal, the result of a consensus with different actors of society, such as young people, congressmen, beneficiaries of social programs, businessmen and departmental and municipal authorities, seeks to protect the most vulnerable, reactivate the economy and stabilize public finances.

Thus, the extension of social programs such as Solidarity Income is proposed, which, according to the proposal, would last until December 2022 and would reach more than 4 million households as of April 2022.

According to the Minister of Finance, under the current scheme of the program, households in extreme poverty and moderate poverty receive $160,000 per month. As of July 2022, they will receive an average monetary support of $267,579 and $195,906, respectively, which will depend on their income level.

Likewise, the project contemplates an incentive for the creation of new jobs for young people and the rest of the population. In this sense, it proposes a subsidy of 25% of the minimum wage for young people between 18 and 28 years of age, not necessarily for the first job, which would cover contributions to pensions, compensation funds and labor risks. This incentive is expected to benefit close to 319,000 young people, which would contribute to substantially reduce the youth unemployment rate from 24.2 % observed in 2020 to 19.3 %.

For the rest of the population earning up to 3 minimum wages, a subsidy equivalent to 10 % of the minimum wage would be provided, which would allow an employer to cover about 40 % of the social security of its employees. This incentive would benefit 271,000 people.

Both subsidies would make it possible to recover close to 500,000 jobs, said the head of the Treasury and Public Credit portfolio. Payroll support -Paef- is another of the programs planned to be extended. It would be focused on micro and small companies and would include individuals with at least two employees.

It would be extended for an additional six months, until December 2021, thus benefiting 400,000 employees, at a cost of 1.1 trillion pesos. On the other hand, the Social Investment project also contemplates greater resources for the payment of tuition for 695,000 undergraduate students of public higher education institutions in conditions of socioeconomic vulnerability, with an annual cost of 700,000 million pesos.

Source: Ministry of Finance

Source: Actualícese