Duque's Party Opposes His Plan to Tax Colombia Food Staples

(Bloomberg) -- Lawmakers from Colombian President Ivan Duque’s party say his government should ditch its plan to tax food staples, and seek other ways of raising revenue.

“The proposal to apply added tax to staples has created a justified concern among the public which, even if it were compensated with rebates for our poorest citizens, would still affect middle-income Colombians,” Duque’s Democratic Center said Friday, in a statement on its website.

The extension of VAT is the main revenue-raising measure in the financing bill sent to congress this week. If lawmakers block it, the government will need to further raise taxes on incomes, ditch a plan to cut corporate taxation or cut spending, analysts from Citi, BBVA Colombia and BTG Pactual said.

The tax bill is intended to narrow the deficit and shore up the nation’s investment-grade credit rating. Last year, Colombia received its first downgrade in 15 years, from S&P Global Ratings.

©2018 Bloomberg L.P.