VAT: proposal to reduce it and replace it with consumption tax

For Alejandro Chacón, the current VAT rate, which is 19%, should be reduced to 8%. This would not affect tax collection.

Representative Alejandro Chacón has made a series of proposals regarding the tax reform. The first one is to replace the VAT with the consumption tax, an idea he had formulated in the debates of the Economic Growth Law.

For him, the current VAT rate, which is 19%, should be reduced to 8%, and he asks that the products of the family basket should not be taxed. For the congressman, this will not affect tax collection.

He points out that, according to figures from the Ministry of Finance, this proposal would increase tax collection by 6 trillion pesos.

Chacón assures that these recommendations will bring multiple supports. He mentions that citizens with lower incomes will be favored,“and at the same time, it would limit the benefits of some wealthy companies that are favored by the abuse of the current VAT deduction system”.

The representative says that the elimination of VAT deductions will increase revenue. “Taxpayers who have a greater contributive capacity should be subjected to proportional tax demands according to their economic conditions, in accordance with the constitutional principles of tax law,” he says.

With a reduction of the VAT rate to 8%, it is expected that the general consumption of Colombians will increase. “With this, the economic activity would receive a necessary impulse to reactivate itself in this conjunctural moment in which the economy of all nations has been affected due to the pandemic generated by the covid-19. Economic dynamism that is urgently required,” he says.

Source: Actualícese