What does Rodolfo Hernández propose in economic, labor and tax matters to be president of Colombia?

Hernández's response on being called the Colombian Trump 1:04

(CNN Spanish) -- 

Rodolfo Hernández will fight for the presidency of Colombia in the second round of the elections against Gustavo Petro.

Whoever wins will have as one of their main challenges to get the country out of the social and economic crisis that deepened with the pandemic.

Just remember the violent protests that erupted in 2021 after a failed tax proposal that sought, among other measures, to increase value added tax (VAT) on various products and services, which the government said was necessary to ease the blows. of the pandemic.

• The 5 key proposals of Rodolfo Hernández to be president of Colombia

Although the administration of Iván Duque withdrew it, this was the opportunity for the demonstrations to expand and millions of people to take to the streets not only because of the months of economic pressure but also because of the deep sense of inequality felt by many Colombians.

The Organization for Economic Cooperation and Development (OECD) concluded in its most recent report that Colombia has one of the highest levels of poverty, income inequality and labor market informality in Latin America.

The proposals of Hernández, who is characterized by his simple and colloquial communication, have been criticized by politicians and experts who, like Petro, also apply the label of populist.

Bruce Mac Master, president of the National Association of Colombian Entrepreneurs (ANDI), pointed out that Hernández's tax proposal would make products more expensive and that some measures to cut expenses (such as the reduction of embassies) would have a counterproductive cost to international level.

The Fiscal Observatory of the Javeriana University indicates the same about Hernández's fiscal proposal: it would increase the cost of producing some goods and services.

The magazine The Economist, which points out that with both Petro and Hernández the risks for Colombia are many, says of Hernández that his proposals are "

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These are the main economic, labor and tax proposals of the independent candidate Rodolfo Hernández, if he wins the presidency of Colombia.

What are the candidates talking about in Colombia before the elections 3:48

Investment in the countryside: produce and export more to reduce imports

"The countryside is the salvation of Colombia," says Rodolfo Hernández in a video published on his social networks where he explains his intention to increase the internal demand for goods and services to reduce imports and maximize exports.

"We are going to restore the country's capacity to produce food. It is a shame that in Colombia these politicians destroyed the countryside. We do not produce what we eat, having here more than 20 million hectares to do so," said the candidate in a Interview with CNN in Spanish.

Within his government program, it is explained that to promote development in the countryside, he will design an incentive and investment policy with projects such as "the self-construction of integral villages and tertiary roads by the rural population."

All older adults will receive pension

• This was the passage of Rodolfo Hernández by the mayor of Bucaramanga

Hernández affirms that, by law, "it will grant a pension to all older adults, regardless of whether or not they have met the requirements," in the form of a basic income.

However, he does not specify how or from where this proposal would be financed.

The independent candidate also says that he will review the implementation "of a tax burden on privileged pensioners" and that, if he wins, he will reform Colpensiones — the State agency that administers pensions in the country — to allow it to compete with private funds in generating investments. .

Lower VAT and no more tax reforms

Rodolfo Hernández proposes to organize the country tax-wise with one main bet: to lower VAT.

The idea is "to make VAT payment so practical that taxpayers do not have mechanisms to evade the commitment to the Nation. We propose to apply a general VAT rate of 10%, almost half of the current percentage, which keeps the family basket free of the tax and reclassify the other excluded goods and services".

The objective is to guarantee collection and make administrative processes more efficient, if all taxpayers contribute 10% VAT, he says, there would be balance in fiscal matters.

In addition, it proposes the creation of a Territorial Tax Statute to increase the base of territorial tax revenues, "without implying new tax reforms."

In an interview with Noticias Telemedellín, Hernández said: "As long as politicians continue to steal money, why tax reform?"

In his government program he says that he will only redistribute sources and improve collections "where avoidance and evasion prevail"

The independent candidate will also seek, if he wins the presidency of Colombia, to eliminate the 4 x 1,000 tax. This is a tax that is charged in Colombia when making a financial movement in which for every 1,000 pesos (25 cents on the dollar), you have to pay 4.

New tax reform, the challenge of the Colombian government 2:53

Boosting entrepreneurs and fewer barriers for entrepreneurs

One of Hernández's main proposals regarding job creation in the country has to do with promoting entrepreneurship, especially digital.

To do so, the candidate proposes "incentives" for digital

in his government program, such as not paying taxes "until three years of sustained operation and performance have been completed." 

It also says that it will offer financial support and advice to young entrepreneurs.

"Ultimately, it's about promoting the culture of self-employment (a person who works for himself), but from a formal point of view," he explains.

In addition, he assures that he wants to reduce the barriers for new entrepreneurs, "reforming and simplifying" the structure of procedures, taxes and renewal costs.

• The Colombia that Iván Duque leaves: challenges, failures and achievements

On the problem of unemployment and informal employment

The OECD points out that more than 60% of workers in Colombia are in an informal labor situation without being registered in social security, which reduces productivity and tax revenues.

To overcome the critical informality figures, Hernández proposes "deepen" the entry into full force of article 108-5 of the Tax Statute, by which taxes can be deducted from employers who offer a first job to people under 28 years of age, according to the laws. 

Manufacturing sector

Hernández has proposed promoting the growth of the manufacturing sector in his government plan, although he does not give details of how he intends to do it.

Stefano Pozzebon, Natalie Gallón, Polo Sandoval, Wilson Barco, and Rocío Muñoz-Ledo contributed to this report. 

MEET THE CANDIDATES:

• Gustavo Petro

• Rodolfo Hernandez

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