Colombia: Duque starts 2021 with a tax reform, health crisis and more economic crisis

By Impulso Socialista

Globally, there have already been more than 96 million infections and 2 million deaths. The USA and Latin America are the most affected, while Europe is experiencing a third wave of coronavirus. At the same time, new strains of the virus are appearing in many parts of the world.

This situation brings to the table two important issues being discussed globally, the continuing economic recession and vaccines as the only way to contain the pandemic. In the last World Bank report for 2020, it was pointed out that this recession is the deepest after the one that occurred during World War II, data such as that 30% of companies reduced working hours, 35% reduced salaries and 20% of workers were laid off. On the other hand, inequality increased drastically, the 10 richest men in the world have increased their profits by half a trillion dollars during the pandemic, a figure that could finance the universal vaccine for covid-19, while 250 million people in the world face absolute poverty[1].

Colombia does not escape this panorama, and the government of Duque – Uribe, is at the service of making the working class and the popular sectors pay for the crisis in favor of the World Bank, the IMF, the imperialist transnationals, the companies and the banks.

Duque increases the foreign debt and seeks to deepen austerity measures

The foreign debt in Colombia would reach a record 56% of the country’s GDP, the highest percentage in the last 20 years, for that reason, as we have been denouncing since the great struggle against the Duque package in 2019, this government seeks to pave the way to increase tax collection through tax, labor and pension reforms, as demanded by the WB, the IMF and the OECD.

The government is already carrying out a series of measures that will allow it to cover the fiscal deficit (90 billion according to CORFICOLOMBIANA) by 2021 and at the same time cover the obligations it has contracted with the IMF. The issuance of TEST bonds for 45 billion for the domestic market, debt bonds for the international market, the possible sale of ISA by ECOPETROL which represents some 15 billion, the tax reform for March. This cocktail, more debt, sale of public assets and political reforms, is the tactic with which the government will worsen the conditions of the working class in order to save a few from the crisis.

The “fiscal” reform, the name with which the government seeks to embellish the tax policy, -since it knows that the people express a generalized repudiation against these austerity policies-, is presented by the Finance Minister Alberto Carraquilla for discussion in March or April. With this tax, they intend to collect 2% of the GDP as required by the agreement with the IMF, that is approximately 20 trillion pesos. In order to reach this exorbitant figure, this reform proposes to expand the VAT taxable base by making products that today include 5%, have 19%, it also seeks to increase the number of wage earners who declare income, no longer only those who earn 4.9 million pesos, but they want to include those who earn 3.5 millionlonger too, meanwhile companies will have their taxes reduced under the excuse of increasing capital investment in the country.

The way in which they intend to cover up this brutal adjustment against the working class is by stating as beneficial the tax on large pensions, the extension of the VAT refund, plus an increase in subsidies of only 800 billion pesos, which would not even come close to covering a decent basic income for millions of people in Colombia that today live below the poverty line. All distracting elements that are not central to the intended tax collection.

This is not the first tax reform of this anti-worker government, since in 2018 it had already passed the disastrous Financing Law, which consisted of lowering the income tax for legal entities and increasing tax exemptions for some business sectors: VAT discounts, industry and commerce tax and levy on financial movements.

The crisis should be paid by capitalists and not by the people

The advance of these policies would lead to deepen the social and economic inequality that the country is already experiencing, which is already critical. According to the latest DANE figures for 2020, unemployment reached 16% compared to 10.5% in 2019, which means that 3.8 million people are unemployed. Extreme poverty increased dramatically from 10.9% in 2019 to 14.3% in 2020. Each of these numbers are alarming and this is why we call for organization and struggle to stop and defeat Duque’s package deal under a program of struggle that gives real solutions to the working class and popular sectors.

It is necessary to begin with the social audit, independent investigation, abolition and non-payment of the illegitimate and fraudulent foreign debt. For a front of debtor countries. The money collected is not available to solve the basic needs of the population, but to pay the speculative vultures that are in the international organizations. All this money should be used to solve the health crisis, to activate the economy and to invest in basic rights such as education, housing and work.

Nationalization of banks and foreign trade to counteract the imperialist economic blockades and to determine what enters and leaves the country, avoiding capital flight.

Those who have the most should pay, that is why we must impose a progressive and permanent tax on big fortunes. At the same time, VAT should be removed from the basic basket, salaries should be increased according to the real price of the basic basket, and layoffs and suspensions should be prohibited.

For the large unemployed and informal sectors a basic income is needed and according to the cost of the basic family basket while the pandemic lasts.

Pandemic, vaccines and a criminal government

Colombia has already surpassed 57 thousand deaths and 2 million contagions by Coronavirus until this February 12, without taking into account the data of avoidable mortality of other diseases resulting from the collapse of health systems nationwide. This situation has been worsened by the insufficient quarantine measure, which although necessary as long as there is no vaccine and eradication of the virus, has clashed with the poverty that increased during 2020 and was not contained under any policy, as the government refused to provide basic income as a way out for millions of families who took out the red rags as a symbol of hunger.

Duque’s government hypocritically comes out to condemn the lack of individual care and agglomerations, while irresponsibly opening the economy, taking thousands of workers to the streets and means of transportation without any real policy to prevent the increase of contagions, as the health system remains underfunded and the privatization of health in EPS continues to define the care and barriers of millions. National health spending reaches only 5.9% of GDP (4.1% public and 1.8% private), and out-of-pocket spending is 16% of total spending.

Today, returning to a total quarantine is not an option for the government and the bourgeoisie, who prefer to count the dead rather than lose profits. Duque and also the falsely alternative governments of Medellin with Daniel Quintero, or of Bogota with Claudia Lopez, along with the rest in the different regions of the country, have only ensured the conditions for businessmen, since they have done nothing in the face of the necessary measures that should have been taken, such as massive testing, quarantines and isolation of detected cases, the increase of ICUs with necessary equipment, the hiring of health workers en masse, the opening and expansion of health services for emergency care, etc. ICU occupancy is already around 70 to 80% nationwide.

In view of this situation, the vaccine issue takes on a relevant importance, however, the situation worldwide is unequal. The imperialist countries and their pharmaceutical companies compete for the development of the vaccine, they concentrate the scientific capital and under the patent with the commercial secret, they do not share the advances so that millions of people can be saved and different countries in the world can produce and improve the vaccine. It is madness, the possibility of a cure exists, but you cannot know it.

Thus, Pfizer, AstraZeneca, Moderna and the Nikolai Gamaleya Center of Epidemiology and Microbiology, which manufactures the Russian vaccine Sputnik V, go around the world with their patent negotiating the sale of vaccines, imposing prices and signing millionaire contracts where the fine print says that they are not responsible for adverse effects.

In the context of this situation, the Duque-Uribe government, which allocated millions to banks and businessmen, continued to defraud regarding the negotiation of vaccines. First it was said that it would arrive in January, then in February or March, and now there is no other explanation than to excuse itself in the commercial secrecy of the pharmaceutical companies in order not to give further justification, but the reality is that this shows that Colombia was left behind in the negotiations with respect to other countries. In other words, there is competition among the poor countries themselves to acquire some of the vaccines, while the imperialist countries use them desperately to avoid the collapse of their economies.

This in no way absolves the corruption and mismanagement of this government, which will seek by all means to guarantee the agreement in favor of the pharmaceutical companies and the powers, that is why Duque is in favor of the sale of the vaccine to those who can pay for it, a measure that if carried out would be tremendously criminal.

So far several countries in the region have already started the vaccination of some sectors of the population, while Colombia is in a sea of uncertainty, lack of planning and corruption.

That is why we demand:

Universal and free vaccination, out with commercial secrecy and that the population be responsibly informed about the vaccination process.

Massive testing, mainly for health workers.

An increase in the salary of all health personnel and the extension of their hiring.

Against the privatization of health care imposed by Law 100 and that we move towards a single, public and universal health system so that the EPSs are not the ones who define access to health care. 

[1] Taken from the latest OXFAM report – The Inequality Virus.