Tax reform Gustavo Petro: Petro’s tax reform is on the right track: Economist | Day by day

Marcela Eslava, dean of economics at the University of Los AndesHe explained some of the elements that the elected president, Gustavo Gómez, has mentioned about what his tax reform would be.

Meanwhile, Eslava assured that one of the great bets of this tax reform, in addition to lowering the general income tax rate for companies, is to prioritize the elimination of many benefits specific that some companies have, especially those that have different formats

“The proposal is very well underway and addresses the concerns that have been raised. In that sense, it is positive,” he explained.

The economist assured that there are 4 points that must be taken into account in the tax reform, among which are:

First, the increase in tax collectionbecause in the standards in which it is, it is very low and insufficient to meet the needs.

Second, the Colombian tax system is not fair and does not contribute to reducing inequality. In this case, the economist assured that this proposal has some important elements, such as the focus on increasing taxes on people with higher incomes and having better record of those people’s assets.

“This tax increase would be given to liquid assets of more than 1,000 million pesos, this can be positive, because those who pay the most now are those with the highest labor income, which are not necessarily those with the highest income when those are derived from capital income,” explained

However, Eslava affirmed that there is still a big question and it is how they are going to make it reach, well, she says that the 40 thousand people who are consigned with the highest income in the country only represent 0.1% of the income. That 0.1 is 6% of the income of Colombia: “to raise 5% of the country’s GDP With people who earn 6%, all income would have to be taken away, and it would not be fair,” he said.

He argued that this solves another problem with the system: the lack of legitimacy, but explained that the numbers are still fuzzy.

Similarly, he stressed that in this tax reform better think about the balance between what people and companies contribute.

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