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CURRENT TAX REFORMS

( IN PROCESS)

Jeisson Cárdenas.
December 2018.

University of Pamplona.
North of Santander.
Economic Technical English
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ORANGE ECONOMY AND FINANCING LAW

Currently, there have been ongoing debates regarding the tax reforms proposed by

the congress, both the 1834 law of May 23, 2017, by means of which the creative

law law is encouraged; The objective of this law is to encourage, develop and

encourage and protect the creative industries. This law, also called orange

economy, from my point of view, in general terms is a good bill, since it is based

on promoting cultural industries which encourage sustainable economic

development because as people acquire culture, in the same way they are

acquiring conscience, which encourages the development of the best capital that

can exist, which is the human intellect; which is an endless resource, that is, it can

be exploited permanently, which contributes to the development and innovation of

the new companies, which will generate an increase in the country's wealth.

Now regarding the financing law, the government has said that it is going

through a fiscal deficit, which is not so serious. As expected, Colombia is a

country which is continuously carrying out tax reforms. For years, in Colombia,

only adjustments have been made focused only on tax collection, but not on an

effective rationalization of public spending and on effectively developing the

productive sectors. . In other words, the tax system has been subject to successive

reforms and counter-reforms, in order to solve the continuous and increasingly

growing economic difficulties. "A successful reform is one that meets the

intermediate objectives (increase collection, improving or maintaining levels of

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equity, efficiency and effectiveness or increase the latter, without altering the

collection) and the basic objectives that motivated it." (Sanchez y gutierrez ;

nineteen ninety five).

The financing bill filed on October 31, 2018 proposes the restoration of the

balance of the national budget through different tax financing mechanisms and

rules, such as the tax on the income of natural persons.

Faced with this, the new director of the Dian, José Andrés Romero,

clarified that it is not that more people are going to enter to pay more taxes.

"Natural persons can be calm. The starting point from which the tax obligation

will arise is not going to decrease, what we are going to do is raise a few

additional points for those who earn the most, "he said.

The other point that they have publicly questioned in Carrasquilla's policy

is their proposal to extend the VAT to the entire family basket, returning it to

people with scarce resources. On that, the minister said that "having a structure

with a quantity of assets taxed at 0% or with exclusions benefits those with the

highest income". According to Carrasquilla, the Ministry has the necessary

information on the population subject to the transfers and is working on

technological adjustments to return the resources. Regarding the extension of

VAT, which is too broad, since it is approximately 60% of the products of the

family basket that pay VAT. Therefore I think, like many people, that this new

reform is not structural but regressive. "The weight of the reform rests on the

increase of the VAT, and the VAT is an inequitable tax, because the poor and rich
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pay the same for the products, besides it is not so true that the food is exempt from

taxes, as the government. Pasta, oils and cereals will be taxed "according to

Robledo, Angela Maria.

From the personal point of view, I believe that the government let go of

the good times and did not anticipate a scenario of economic risk, that is, the

government has an inefficient management of the public finances of our country,

under this assumption, it would believe that the government is managing pro-

cyclical economic policies, which are based on the fact that, in times of economic

abundance, more is spent than what goes into taxes, that is, it grows at the expense

of tomorrow's growth, (in this case, I would think that a percentage of the deficit

is that it is due to the fall in the price of oil and hydrocarbons.) and in times of

economic crisis increase taxes and interest rates, (the VAT increase).

Now, speaking of the return of VAT to strata 1 and 2, I think it would be

correct as long as it is carried out efficiently, the problem now is that the

population, which the Colombian government considers of middle income,

actually suffer with that income to sustain themselves, they have to pay the same

value as people with very high incomes, for the same products, that is, it is still an

inequitable tax.

"What the state must do is strengthen the siege of evasion, the flight of tax

havens, corruption, and eliminate tax benefits. With these additional resources, the

endowment of public goods must be increased to increase the competitiveness that

is decreasing. "Said Valencia, Mario Alejandro.

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REFERENCES BIBLIOGRAPHY

1. URL:http://es.presidencia.gov.co/normativa/normativa/LEY%201834%20DEL%2023%2

0DE%20MAYO%20DE%202017.pdf

2. URL:http://www.minhacienda.gov.co/HomeMinhacienda/ShowProperty?nodeId=%2FOC

S%2FP_MHCP_WCC-059074%2F%2FidcPrimaryFile&revision=latestreleased

3. URL:https://www.larepublica.co/economia/los-cinco-elementos-que-tiene-la-reforma-

fiscal-que-propone-alberto-carrasquilla-2768450