Day without VAT: President Gustavo Petro explained why the December day was eliminated

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According to the head of state, the decision was due to the fact that it does not differentiate between national and imported manufactured products, which could affect the economy

Day without VAT: President Gustavo Petro explained why the day was eliminated. the day of December

President Gustavo Petro pointed out that the decision to eliminate the Day without VAT was due to a lack of differentiation with national products

In the next few days, the decree prepared by the Ministry of Finance should be issued to repeal the article that established the Day without VAT on December 2. A decision that, just after its announcement, caused controversy on the part of trade unions that considered this exemption as an opportunity to boost the economy. But there is no going back, Minister José Antonio Ocampo and President Gustavo Petro defended its elimination.

President Petro responded via Twitter to Jaime Cabal, president of Fenalco, who defended the Day without VAT on Radio Nacional. According to the union leader, the trade sector will stop selling 12 trillion pesos, which they consider a considerable figure in the national aggregate, because the value chain includes national production.

For the Head of State, the origin of the exempt products during the exemption day is one of the reasons for not carrying out the third Day without VAT scheduled for next month. Petro maintained that the acquisition of imported goods can generate damage to the national economy.

“To the extent that the day without VAT does not separate the sale of national products from imported ones, it generates a heavy damage to the economy. If we want to improve the economic situation, we must stop buying imported products if they are produced in Colombia,” the president wrote.

Day without VAT: President Gustavo Petro explained why the December day was eliminated

President Gustavo Petro pointed out that the decision to eliminate the Day without VAT was due to lack of differentiation with national products

It is an inherited day of exemption, because it was the government of Iván Duque who created the norm that authorizes the days without VAT, up to a maximum of three per year. The previous president called two in the first half of the year and the third would be scheduled to do Christmas shopping.

Petro and his political allies were critical of that initiative before coming to government. However, in the process of the tax reform, it had been approved to carry out that last day. Even Senator Gustavo Bolívar had proposed that it be carried out only by excluding national products from the tax.

Contrary to that possibility, Minister José Antonio Ocampo confirmed that from the Ministry of Finance they work in a decree to repeal the Day without VAT for various reasons. The first is that they consider that it is too early to carry out the corresponding logistics and that it does not compensate for the costs that are assumed for collection.

Likewise, they maintain that the three dates called in 2021 implied 471 billion pesos in fiscal cost that represented untaxed sales of more than 31 billion pesos in the total number of days. For this year, they estimate that the fiscal cost could be around 276 billion.

The director of Fenalco, in dialogue with Radio Nacional de Colombia, indicated that the fiscal cost was compensated the same day. “What some government officials have sometimes not understood is that the effort of products that do not have VAT, that cost is compensated, because sales grow more than 100% on any given day. So the products that do have VAT, that VAT collection is higher than the one that is not collected,” he said.

The Colombian Chamber of Electronic Commerce (CCCE) pointed out that these dates are key for electronic commerce, which have generated sales through digital channels for 4.97 billion pesos through more than 13.2 million approved digital transactions.

In addition, since that Guild have worked with commerce so that they are prepared for the date of December 2, in infrastructure, logistics, billing, inventories and others. “We hope that the National Government will reconsider its proposed decree that seeks to eliminate the third day without VAT in 2022,” said María Fernanda Quiñones Zapata, executive president of the CCCE.