May 03, 2021

Andrew Campbell 

Colombia's President Iván Duque has dismissed his controversial tax reform bill after 4 days of mass nationwide protests. In the televised statement on May 2, President Duque announced his administration would make new proposals and seek consensus with other parties and organizations. He acknowledged his withdrawal and would work on consensus on temporary taxes imposed on businesses and dividends, income tax hikes for the wealthiest, and national austerity measures.

Earlier President Duque insisted the tax reform was vital to ensure fiscal stability in Colombia's finances. The tax rises, including the leveling of sales tax on utilities and the number of goods covered by value-added tax (VAT), were needed to respond to the economic crisis amid the COVID pandemic. It is necessary to maintain its credit rating and funding social programs.

Union leaders opposed the new tax bill and blamed it would disproportionately impact the poor who were hurt economically by the COVID-19 pandemic. The tax reforms would also affect the threshold with a monthly income of US$ 656 and more. In Colombia, tens of thousands of middle-class Colombians and members of indigenous groups took to the streets on April 28 and joined a national strike organized by trade unions to protest against the president and his proposed tax reform bill. At least two protesters were reportedly killed.

In addition, local officials reported demonstrations had been the most violent in the country's third-largest city, Cali, and confirmed 3 fatalities, including a police officer killed in Soacha. According to the statement released from the procurator's office, it was investigating 14 deaths due to the recent unrest across Colombia.

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