Colombian Candidates Debate Tax

by Mike Godfrey, Tax-News.com, Washington

01 June 2010

Tax-and-spend green presidential candidate, Antanas Mockus, suffered a setback in the first round of the Colombian elections, winning only 21% of the vote against the conservative candidate, Juan Manuel Santos, with 47%.

The biggest clash in the views of the two leading candidates is over taxation. Mockus has continually advocated strong increases in tax; he would, according to El Tiempo, increase taxes on the wealthy to expand education provision. "Taxes are needed or two reasons; firstly, the constitution. We cannot continue to slowly implement the charter's laws; and secondly, if Colombia wants to build a future it needs to invest more in science and technology and not in scraps like at the moment," Colombian Reports quoted him as saying.

The pro-government candidate, Juan Manuel Santos, wants to raise government revenue through higher investment and production, especially in oil and mining, and believes tax hikes are unnecessary. Colombia has the capacity to double oil production to 1.5 million barrels within the next five-year term, if given the right incentives according to Santos's oil adviser, German Cardona.

Cardona added that, in the background of soaring demand and higher taxes in places like Australia and Chile, avoiding tax rises was incentive enough, whilst improving security and political stability would be the best incentive. Santos feared for the future prospects for growth and the very existence of the middle class if income and property tax rises were implemented by Mockus.

Mockus was showing very well in the opinion polls prior to the first round, and gained favour among commentators with the prospect of his being the first green party president to be elected. He still has the prospect of picking up a large volume of the left vote in the second round on June 20, and he has not yet been discounted as potential overall winner.

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