October 14, 2022

The director of the International Monetary Fund for the Western Hemisphere, Ilan Goldfajn, considered that the tax reforms proposed by Colombia and Chile “advance in the right direction.”

Goldfajn expressed himself in the same terms in which Joseph Stiglitz, a Nobel laureate in economics and professor at Columbia University, spoke earlier, considering that the path taken by Colombia can be an example for other countries, particularly those that export energy or food.

Both participated in Washington in a round table on the tax reforms of Colombia and Chile and on the remuneration formulas to face the current moment, organized among others by ICRICT (Independent Commission for the Reform of International Taxation of Corporations), Oxfam and Latindadd and by the Tax Justice Network of Latin America.

Goldfajn defended the need to “mobilize resources” to “ensure” sufficient funding for social policies, to “support the most vulnerable”, and therefore valued the effort in this regard that the two countries are making.

For his part, Stiglitz recalled that ICRICT has been emphasizing for some time “the benefits of a tax on wealth, which is one of the parts of the Colombian reform,” as he pointed out to EFE before the round table.

The expert also defended the windfall tax on oil and coal companies that Colombia plans to introduce, which can “help fix the redistribution” of the benefits of hydrocarbon companies and, furthermore, serve as an ally in the transition towards a clean economy.

For Stiglitz, one of the lessons of the Russian invasion of Ukraine is that dependence on fossil fuels is very dangerous.

“Weather is unstable, but dictators are even more unstable,” said the economist, who added that the world should coordinate to launch a huge investment in renewable energy that would also serve to stimulate economic growth.

Stiglitz also valued the recent wave of progressive victories in Latin American countries, and stressed that the agenda in favor of equality of governments such as Chile or Colombia is also an agenda in favor of growth.

In this round table, the Minister of Finance of Colombia, José Antonio Ocampo, and the Deputy Minister of Finance in Chile, Claudia Sanhueza, were also defending their respective reforms.

Eliminating the tax benefits enjoyed by the richest and specific sectors and imposing a tax on the highest incomes are some of the measures of the Colombian reform that, according to Ocampo stressed, respond to a social demand that was made clear in the protests of the last year and with the result of the elections that gave the Presidency to Gustavo Petro.

Ocampo also defended the surtax on profits from oil and gas that is to be approved, because in the same way that the coffee sector contributed more when it enjoyed its “boom”, the same should happen with fossil fuels.

Both Ocampo and Sanhueza defended that their reforms are committed to fiscal consolidation, and in this sense the deputy minister stressed that the Chilean proposal seeks to improve the tax system to make it “more effective” and to serve as a tool for the country to have a of permanent income with which to function.

Both public representatives insisted on the appropriateness of raising taxes on the rich at a time like the present.

A commitment that was also defended by the director of Oxfam, Gabriela Bucher, who gave Chile and Colombia as examples of countries that are “raising their voices” for the people and that are committed to increasing taxes on those who have the most to reduce inequality.

Joseph Stiglitz was confident that these governments will succeed in their quest to build a more equal society, which in turn will affect the number of people who have access to education or housing and stimulate economic growth.

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Source: Elmostrador