Colombia Tax Plan
On July 6, 2021, Colombia’s Independence Day, President Ivan Duque presented a new $4 billion tax plan. The plan aimed to help pay for social programs and pandemic-related expenses. Due to Colombia’s new tax plan, thousands marched through Colombia’s main cities in protest. Many are angry at their government since it did not solve any of the populations’ problems. Colombian citizens believe that the new Colombia tax plan is not doing enough to help their people.

Tax Reform

This new tax reform is much smaller than the previous $6.3 billion packages that the Colombian government presented in April 2021. The government withdrew the larger package due to mass demonstrations and lawmaker opposition. Even after many protests and marches, President Ivan Duque insisted that this plan is vital at a time of rising debt. The Colombian government must pass the plan to help social programs stay afloat.

As Duque opened Congress’s second legislative period of the year on Colombia’s Independence Day, Duque told legislators the “social investment law, which we will build between all of us, is the largest jump in human development in recent decades.”

The new reform places a higher tax burden on the company’s earnings. It discards the $6.3 billion package to impose a tax on basic items ranging from coffee to salt. The reason for protests for the new plan is that the plan seems to not be able to do enough for spending on education and job creation. In 2020, the economy contracted 7% and pushed an additional 3 million people into poverty, worsening conditions in Colombia.

The People of Colombia

Francisco Maltes is leading one of the groups of anti-government demonstrations while serving as the president of the Central Union of Workers. Malte’s union is part of a collection of unions that plans to present congress with 10 proposals on addressing Colombia’s social and economic crisis. Dissolving the nation’s riot police is part of their plans as well. This is creating a basic income program for workers that would make monthly payments of $260 to 10 million people. Maltes and his union tie directly into the recent string of protesting. Maltes has stated that protests will continue because President Duque has failed to solve Colombia’s list of problems.

During the Independence Day demonstrations, protestors also stated that they wanted justice for the death of many youths who police recently killed. Human Rights Watch is an international non-governmental organization that conducts research and advocacy for human rights. It is currently collecting data linking police to the deaths of 25 confirmed young protesters during the recent wave of demonstrations. The number of deaths still remains a mystery due to many local organizations stating that the death count could be higher.

Withdrawal of New Tax Reform

After many months, the Colombian government unveiled Colombia’s new tax plan, much to the Colombian people’s dismay. The purpose of the Colombia tax plan is to address the social and economic crisis. However, the verdict across Colombia’s population is clear. The verdict on the impact of the reform punishes the middle-working-class and ruins any hope of economic recovery. This will push many people into poverty. Unless an agreement comes to fruition in Congress in the coming months, Colombia could risk its post-pandemic social and economic recovery.

Colombia has a rare opportunity to create a better and more ambitious tax reform through the current circumstances. The leadership of President Duque must bring Colombia together and come to a consensus, to make a version of this proposed reform bill a reality.

– Aahana Goswami
Photo: Flickr

people in ColombiaIn collaboration with the Colombian government, the World Food Programme (WFP) created a pilot program in August 2021 to help fight poverty and food insecurity in Colombia. The country faces significant struggles due to the pandemic and rising tension with the government, increasing the number of those in poverty over the past year. The program hopes to help people in Colombia obtain more access to food for their families, as food security is a particular struggle, especially over the past 15 months or so.

Protests in Colombia

Since the end of April 2021, more than 50 people have died during protests across Colombia. At first, the demonstrators opposed a tax reform lowering the tax thresholds of salaries. As such, any individual earning 2.6 million pesos (roughly $684) or more per month is subject to tax. Furthermore, many tax exemptions would disappear and there would be an added increase in taxes for businesses. The aim of the reform was to help the economic fallout caused by the COVID-19 pandemic. Thousands of people protested, and after four days, President Iván Duque finally declared that he would withdraw the bill.

However, the protests did not stop there. There was significant police presence during the marches as a court order prohibited protesting due to the risk of spreading the COVID-19 virus. Human rights groups say riot police had used tear gas and even live ammunition to disperse protestors. Evidence from social media show violent clashes, and now, many have lost their lives. Demonstrations have only strengthened as anti-government protests continue since November of 2019. More than 2,300 citizens and members of security forces were injured as the protests persisted.

Protests, led by the National Strike Committee, go on for several reasons, but the main issue igniting outrage among citizens was “the actions of riot police.” Protests against the police began long before the pandemic as tens of thousands marched in 2019 after the death of Dilan Cruz, “a teenager who was hit by a projectile fired by riot police at an anti-government protest.” The protestors want the riot police to disband and security forces to have more accountability. However, the president does not currently plan on disbanding the riot police.

Poverty in Colombia

Poverty in Colombia is another significant problem as the pandemic pushed more than 3.6 million people into poverty. In some cities like Quibdó, the number of people experiencing extreme poverty rose to 30% and in the supposed “economic powerhouse” of Colombia, Medellín, the rate of extreme poverty is now 9%. Indigenous groups joined the protests against inequality and the riot police as they were hit the hardest due to violence in rural areas. Before any progress can be made, President Duque said protestors must lift all roadblocks as the barriers have already caused significant damage to the economy. On May 28, 2021, the president said “he would deploy 7,000 troops to clear main highways.” Duque ruled out the protesters’ main demand of dismantling the riot police so it is likely that protests will arise once more.

Poverty Statistics in Colombia

  • Poverty in Colombia rose from 34.7% in 2018 to 35.7% in 2019, equating to 662,000 people falling into poverty. Just a year after, 3.6 million fell into poverty during 2020.
  • Inequality measured by the Gini index, which looks at the distribution of income for a population, went upwards in 2019 as the Gini index measured inequality at 52.7. Income inequality continued to grow in 2020.
  • There were about 2.5 million job losses in 2020.
  • In 2020, the unemployment rate jumped to 15.9% and 22% of citizens worked less than 20 hours per week.
  • Challenges in Venezuela made food insecurity a significant hurdle as 1.8 million Venezuelans and 500,000 Colombian returnees entered Colombia for food and other basic resources.
  • The Venezuelan crisis means at least 1.8 million people in Colombia “require food assistance.”
  • The United Nations projects that 5.1 million Colombians require humanitarian aid.

Help From the World Food Programme

The WFP and the Colombian government are fighting poverty in Colombia through the pilot program, expanding the national social protection system to include migrants and vulnerable host communities. The assistance “included cash transfers and in-kind food distributions aimed at more than 72,000 vulnerable people, among them Venezuelan migrants, Colombian returnees and vulnerable Colombians.”

The WFP and the Colombia Administrative Department for Social Prosperity worked together to fight Colombia’s poverty crisis. The cash transfers from the WFP “aligned with the emergency social protection programs provided by the Government of Colombia, to ensure consistency with the national social protection system.” The WFP could obtain important information from the national social registry to better understand where to efficiently use its resources. Poverty in Colombia continues as a significant concern, but the program provides hope, alleviating food insecurity for thousands of families.

– Alex Alfano
Photo: Flickr

Colombia's National Development PlanWhile Colombia has magnificent landscapes and rich cultural history, the country is also rooted in deep political and economic inequality. In 2018, Colombia’s poverty rate stood at 27.8%; this measure defines poverty as those living on less than $5.50 a day. Unfortunately, Colombian households led by women are more likely to endure poverty. Thus, Colombia finds itself in need of reform. Hopefully, poverty will decrease with the implementation of Colombia’s National Development plan.

A Look Into Colombia’s Recent History

Colombia’s poverty rates and development plan cannot be explained without the inclusion of the country’s last five decades of civil unrest. Colombia’s civil war involves the Revolutionary Armed Forces of Colombia (FARQ), the National Liberation Army (ELN) and the Colombian government. The conflict largely revolves around the call for economic reform. The FARQ and the ELN were founded in the 1960s to “oppose the privatization of natural resources and claim to represent the rural poor against Colombia’s wealthy.”

Although the FARQ and the ELN cite good intentions, Colombia’s civil war has led to at least 220,000 deaths, 25,000 disappearances and 5.7 million displacements “over the last half-century.” The U.S. State Department calls these groups terrorist organizations. Unfortunately, the consequences of this civil war, like all other civil wars, had devastating effects on the countries’ social and political spheres. In 2016, the Colombian Government and the leaders of the FARQ signed a peace agreement, hoping to bring unity to the country.

The National Development Plan

However, three years later, the promises of reinsertion, protection programs and rural remain unfulfilled and the violence continues. Fortunately, this could change with Colombia’s National Development Plan (PND). This proposal “combines the government’s financial resources with grassroots participation which the government calls ‘co-creating together,’ a form of engagement that will play a key role in building sustainable peace.”

Launched by President Iván Duque in 2018, Colombia’s National Development Plan has a budget of $325 billion. The plan hopes to address societal, social, economic and political issues within the country. But, its most ambitious goals rest on “education, employment, entrepreneurship and environmental sustainability.”

Eradicating Poverty

One major goal of the PND is to bridge the gap between the economic classes, eradicating extreme poverty. Today, 1.9 million Colombians are in extreme poverty; the government hopes to implement the Sisben IV program, which “will see State resources delivered to the most vulnerable members of society through subsidies.”

The PND aims to alleviate poverty by stimulating the economy in a multitude of ways; state subsidies are just one example. For instance, Colombia plans to develop creative industries, “such as visual arts, software development and cultural industries.” The national administration also plans to reduce unemployment by more than 1% through the creation of 1.6 million jobs. Additionally, “The plan is also targeting the development of international trade and the promotion of foreign investment in Colombia as a means of increasing the capacity of the economy.”

Education and the Environment

Increasing employment and subsidies will certainly help the economy directly. But, the PND also hopes to improve the economy in the long run by developing education systems and improving the environment. For example, the PND hopes to increase participation in the public education system. Administrators aim to double “the number of students who are attending a single session school day from 900,000 to 1.8 million.” In terms of the environment, President Duque’s plan aims to invest $3 billion in sustainable development and to plant “180 million trees in order to stimulate a rejuvenation of the environment.”

For five decades Colombia has struggled with internal strife, leaving the country torn in the political, social and economic arenas. Colombia’s most vulnerable people, the impoverished, have seen little improvement in recent years. Colombia’s civil unrest and high poverty rates left little hope for the future. However, the 2018 National Development plan sparks the potential for change. The plan proposes both direct and long-term solutions for poverty through investments in education, employment, the environment and the economy. Hopefully, Colombia’s National Development plan will benefit the nation’s impoverished communities.

Ana Paola Asturias
Photo: Flickr