Colombia presidential hopeful Fajardo proposes tax reform to fund more social spending
By Julia Symmes Cobb and Luis Jaime Acosta BOGOTA (Reuters) - Colombian presidential hopeful Sergio Fajardo told Reuters on Tuesday that if elected his government would seek to raise income taxes on
March 8, 2022
By Julia Symmes Cobb and Luis Jaime Acosta
BOGOTA (Reuters) – Colombian presidential hopeful Sergio Fajardo told Reuters on Tuesday that if elected his government would seek to raise income taxes on the country’s highest earners to expand social spending.
Fajardo, a mathematics professor who narrowly missed making the runoff in Colombia’s 2018 presidential election, looks set to win his coalition’s primary in a Sunday vote, setting him up to represent the grouping of centrist and center-left parties in May elections.
The former governor of Antioquia province and mayor of Medellin has proposed an $8.65 billion tax reform to fund more spending on education, jobs, and security while combating tax evasion and requiring more contributions from the wealthy via income taxes.
“We want individuals to pay more, those who have the most. There are a very few people who have a lot and many who have nothing,” said Fajardo, 65, at his campaign headquarters in Bogota.
Fajardo, a long-time university professor and father of two adult children, said however he would lower the tax rate on businesses from the current 35%, although he said it was too early to give a new figure.
“Companies that generate employment will have a lower tax rate,” he said.
The government of President Ivan Duque has struggled to push through its own tax measures, which included a failed effort to raise a value added tax. The proposals were met with street protests that occasionally turned violent.
Nonetheless, Congress passed a modified $4 billion tax reform last year, which included a corporate tax rise and public spending cuts.
But investors have called for more. Colombia is grappling with rising debt and wavering investor confidence after ratings agencies Fitch and S&P downgraded its credit rating to junk.
The next government will also need to deal with continued violence by illegal armed groups involved in drug production and trafficking.
Fajardo supports the 2016 peace deal signed between the then-government and the former Revolutionary Armed Forces of Colombia (FARC) rebels, and said he would be willing to hold peace talks with the National Liberation Army (ELN) guerrilla group if they show commitment to the process.
“We need to see what is the real willingness from the ELN to enter into a peace process,” Fajardo said. “Because what we’ve seen is destruction and terror.”
Dissident members of the FARC who have rejected their former group’s peace deal will not get another shot at talks, he added.
“They are groups associated with narco-trafficking. There’s no negotiation there.”
Fajardo ruled out restarting aerial spraying of herbicide glyphosate to combat coca cultivation, which Duque has tried unsuccessfully to reinstate amid judicial blockages on public health and environmental concerns.
Although Fajardo supports continued exploration for oil, Colombia’s top export and source of foreign currency, he said he would not allow fracking.
The country’s top administrative tribunal is weighing whether to approve commercial use of the technique, amid protests from communities afraid it will damage water sources.
“No, fracking no. And that’s a decision from an environmental perspective, about what our biodiversity means for development,” Fajardo said. “I have no problem if there is more oil exploration, always with major environmental and social conditions.”
(Reporting by Julia Symmes Cobb and Luis Jaime Acosta, Editing by Rosalba O’Brien)