Continuity Candidate Wins Colombian Presidency

by Mike Godfrey, Tax-News.com, Washington

22 June 2010

Colombia has rejected tax and spend green candidate, Antanas Mockus, decisively in the presidential elections in favour of the continuity candidate, Juan Manuel Santos. The former defense minister previously had also held the post of finance minister in the Uribe administration.

Santos wants to raise government revenue through higher investment and production, especially in oil and mining, and believes tax hikes are unnecessary. His goals include lower corporate taxes, and other ways of improving the investment climate to promote growth in his five key sectors: infrastructure, housing construction, oil and mining, agriculture and improved education.

He wishes to combat the 12% unemployment rate by tackling the black economy and bringing those jobs into the formal economy. Santos expects such tax base-expanding measures to reduce the budget deficit from the present 3.6% of GDP to balance by 2014, by boosting growth to 6% within two years.

With regard to oil revenues, Santos plans to set up an equalization fund and an investment fund for infrastructure and promotion of agriculture with an annual investment equivalent to 1% of GDP in each fund.

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