Finance minister, Helio Fallas, said that if the Congress approves the Value-Added Tax (VAT) in August, the government would receive two loans for a total of $1 billion.
The VAT approval would be a condition set by the World Bank and Inter-American Development Bank to lend funds on conditions of low-interest rates and long-term payment.
According to Fallas, the new tax will be a good sign to risk-qualification agencies that will evaluate the country’s finances on September.
Since 2015, the government submitted the congress the proposal to transform sales tax into a VAT, which implies to reduce tax-free services and also raising tax rate from 13 percent to 15 percent within three years.
Source: La Nación.