According to the Ministry of Finance, if the new taxes are approved, the government will only be able to reduce fiscal deficit in little less than half.
The Value Added Tax (VAT) and the income tax reform promoted by the executive branch, would lower the deficit by 1.93% of the country’s GDP, equivalent to approximately ¢586 billion.
The government is promoting the transformation of the Value Added Tax (VAT) raising it to up to 15%.
If approved, this tax would represent 1.33% of the GDP in terms of revenue. The remaining 0.60% corresponds to the income tax reform.
Despite the government’s pressure in the Legislative Assembly for the approval of these taxes, most of the opposition disagrees and demands the approval of projects to contain high public spending first.