The next five months of this year will see great budgetary and cash investment by the Government. This was announced by the Minister of Finance, Ricardo Bonilla, when referring to the criticisms caused by the delay in the investments of the new resources that produced the tax reform.
On the other hand, Minister Bonilla reveals that Colombia is going to propose to all finance ministers from Latin America to unite to contain what he calls “tax evasion” with imports of goods through digital platforms such as Amazon and Netflix. Minister Bonilla’s statements are made in his dialogue with this chronicler for EL TIEMPO. The official also talks about the revaluation of the peso
What is happening with the value of the dollar, Mr. Minister?
We are returning to the pre-pandemic condition. The markets have understood that a fiscal adjustment is being made and that despite the fact that the measures are painful and drastic, they must be taken due to current and fiscal account deficits.
Do you think that the price drop will continue?
I think we are stabilizing. The country can’t stand a revaluation.
Is revaluation lower than $4,000 per change?
The country is not interested in a greater revaluation; nor a mismatch and volatility in the exchange rate. There was very strong expectation that the US dollar was going to shoot above $5,000, but we are back on historical path.
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Next week there will be a summit of finance ministers in Cartagena…
Yes, in order to seek to homogenize a position vis-à-vis the UN, the World Bank, the OECD and other countries, to tell them that we want fair, equitable international taxation, that not only review the tax status of each country, but also how we look at the tax position of multinational firms that have effective participation in the countries, but do not contribute to the finances of the countries where they intervene, they only pay taxes in those of origin
Wasn’t the summit to study the problem of tax havens?
It is one of the components, because today we have international platforms of firms that have a commercial presence, an economic presence. What we want is to seek a fair and equitable taxation against the countries of origin. Platforms like Amazon, Netflix and a series of platforms that do not pay taxes here. The objective of the summit is to adopt a joint position of the South American and Caribbean finance ministers.
But if that agreement is reached, will there be internal taxation for purchases through those platforms?
Later on, it should have an impact on making tax adjustments in each country. We are not proposing a tax reform today to tax this type of thing. The objective of the summit is to come to an agreement in Latin America to build a unified position and not go isolated to these scenarios.
But I knew that you, precisely, are going to propose at that summit of ministers, some kind of taxation on the platforms…
I am going to propose that the platforms be effectively recorded, that everything that has a representative presence in the countries, even if it does not have offices, has some degree of return to the countries where this type of activity is carried out and that we reach an agreement on international stages so that this is fulfilled.
But an agreement with whom?
With the UN, in the OECD, for this to be a world policy to be built because today it is isolated and the countries of origin are not interested in participating.
Of course, but the objective is to tax…
At some point we have to get to that.
How far can that kind of evasion go today?
Look, those numbers are so abstract and hypothetical. It could reach 50 billion pesos. This type of economic activity is new, it has been developing for a very short time. But for now it is a hypothetical figure, it is an expectation.
But if I say the Minister of Finance announces that there will be measures to contain the evasion that is configured through the use of platforms, am I telling the truth?
Yes, sir, you are telling the truth: what we are going to look for at the summit is a common pronouncement, to give continental strength exactly to the position of imports through platforms. That there are platforms, yes, but that they pay taxes. That is.
On the other hand, Mr. Minister, there is a lot of criticism from economic sectors about the drop in government investment. The calculation is that the Government is only investing 27% of the resources it has. What is the cause of that?
There are two types of execution: budget and cash. The first is when the entities commit the resources, receive the items and contract a work. The second is the state’s operating expenses. As of June 30, it corresponds to 48%, that is, in six months it probably has half committed. In investment expenses, 58% is committed. The budget execution as of June 30 in operating expenses is 40% committed and in investment it is 27%.
Very low… Don’t you think?
In the investment, only 27% is executed in cash, but 58% is committed. It is the time lag between committing resources and paying them.
(It may interest you: The Colombian economy continues to slow down, in May it grew only 0.65% annually)
Much of the resources that will follow the tax reform are frozen…
The budget addition, which includes the income from the tax reform, was only approved in June and was sanctioned at the beginning of July, 8 days ago. I am just incorporating them into the budget and the entities of the National Government have the next five months to execute them.
So what’s coming up now in these last five months is a great investment?
We are already delivering availability certificates for all entities to execute, in this second semester. That’s why we couldn’t run it in the first one. Now comes a big investment. In public works, they already have the resources so that there is financial closure and a series of sections that must begin to be built are resolved. And in housing, already in the initial installment and interest rate subsidies, financial closing and delivery of the properties can be made.
So, Minister, do you have any calculations on how much the investment that the Government will make in the second half of the year could amount?
In highways and tertiary roads, the execution will be $3 billion. But, unfortunately, we now have the problem of the road to the Llano. The alternative is to continue building viaducts away from the mountain.
Are you afraid that possible increases in food due to the lack of communication with the Llanos produce increases in inflation?
We expect to close inflation at 9.5%. Today it is at 12%. We have to monitor what happens with food, whose prices could rise temporarily.
Speaking of inflation, Mr. Minister, the financial sector has announced a large drop in credit requests. This seems to be reflected in the decline in the country’s growth. What to do with it?
The drop in credit is indeed a consequence of the economic slowdown that the whole world is experiencing. The expectation was that we would grow this year at 1%. I think we can grow at 2%. That means that we are going to grow more or less twice what is projected, we are not going to return to the rate of 7% or 11% of previous years.
Aren’t high interest rates playing a role?
The bank’s decision in June was to leave it stable. If the issue of rates is brought up again in July, it will surely remain stable. I don’t know in August. The expectation is that in September the bank begins to lower rates. For now, there is a distance between the intervention rate and inflation of 100 points. Out of prudence we want to see how inflation continues to decline.
Are we going to continue at 13.25% for now?
For now I think we are going to continue like this from now until September.
But, then, minister, does the fact that there will be a drop in credit requests also mean that this will impact the country’s growth?
Yes, and the big question we are asking is how we are going to achieve recovery, because the State’s resources are insufficient. It is necessary to make a financial closure in which the State and public and private banks contribute.
But are we slowing down yet?
We already feel the economic slowdown, that’s it. What we have identified is that in this second semester we can develop activities that contribute to reactivating the economy, with a great boost to public works and housing.
What is the house plan?
The home plan had a mismatch between the down payment rate subsidies and the interest rate subsidy. Today these two subsidies are aligned and builders and banks say that now there is financial closure to be able to deliver reactivated units. We are talking about between 35,000 and 65,000 homes in the second semester.
Are they going to make it?
The Ministry of Housing received the resources so that it can apply $3.2 billion in subsidies.
What will happen to the Federation of Coffee Growers? What will happen to the Coffee Fund?
We have proposed an agenda to the Federation of Coffee Growers. We proposed the date of August 2 or August 16 to meet and develop topics.
What kind of topics?
We want to review how the Coffee Fund is working, what is happening with the futures contracts that have not been fulfilled. The Federation should have received about 56.7 million kilos of coffee in futures contracts and has only received 5.9 million, that is, 10%. And most cooperatives have difficulties. And we want to review what the merchant fleet’s liabilities are.
Hasn’t been paid yet?
No, sir, and it is within the difficulties that the Federation has.
Is the Federation not working well?
Private exporters are exporting more than 65% of the coffee.
Could it happen that the Coffee Fund is shared between the Federation and the private sector?
It is absolutely necessary that we can with all the players in the sector.
I repeat, Mr. Minister, are they going to take away the resources of the fund from the Coffee Growers Federation?
We are not going to take away the resources of the fund. What we want is to organize, to see how the chain works in Colombia.
Will the fund continue to be managed by the Federation?
Yes, he still drives it. We have to see if the accounts are adequate.
(In addition: Dollar is trading again at a price that has not been seen for almost 13 months)
That sounds like a threat…
No, it’s not a threat.
And are you satisfied with the management of the new manager, Germán Bahamón?
We have not yet reviewed its management. That is what we want to do.
Isn’t this confrontation between the President and the entity extremely risky?
We want to strengthen the institutional framework. The Federation is an actor, but the exporters are other actors, the coffee processors are other actors, and the cooperatives are other actors.
But does that mean, Mr. Minister, that the other players in the coffee industry will also participate in the management of the fund?
No. It means that we can’t just with one actor and forget the others. It is not about Mr. Bahamon. This is a process that comes from behind. Private exporters have been gaining space. The cooperatives have existed for a long time, but today they have difficulties and there are some broken ones. What we seek is to strengthen the institutionality!
But Bahamon’s choice cost his predecessor his job. Institutionality?
We are not thinking of changing Bahamon or anything like that. We simply want to get to know and organize the coffee chain well.
YAMID AMAT
Special for EL TIEMPO
