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High tax revenue may lead Colombia to unfreeze social spending -finance minister


Reuters


BOGOTA, Aug 14 (Reuters) - Colombia could restart some stalled spending after tax revenue collected during the first seven months of the year beat the government's goal, Finance Minister Alberto Carrasquilla said on Wednesday.

The government was forced to freeze some 10 trillion pesos ($2.9 billion) of planned spending in the 2019 budget, including on social programs, after Congress approved a much-modified tax reform bill last year that raised 44% less than originally sought by the government.

Tax revenue was up 10.7% year-on-year between January and July to 96 trillion pesos ($28.2 billion) - 103.5% of the government's goal for the period.

"From the point of view of the freeze it could have implications, we'll have to look at the fiscal numbers," Carrasquilla added, without providing further details of what spending might be reactivated with the tax windfall.

The minister said at the end of July that Colombia will need to raise an additional 8 trillion pesos to finance the proposed 2020 budget, which has lead some analysts to speculate that the government may propose new reforms, an idea rejected by Carrasquilla.

Latin America's fourth-largest economy has a fiscal deficit goal of 2.4% of gross domestic product for this year and 2.1% for 2020. The figure is considered key to maintaining its current credit ratings.

($1 = 3,407.76 Colombian pesos)









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