Hello, and welcome to the Latin America Weekly newsletter! In this issue: a deep dive into the tax reform presented by Gustavo Petro’s government in Colombia. Chile’s recent diplomatic bumps. And a de facto power grab in El Salvador.
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Petro’s tax reform may be too ambitious
In the first week of October, a congressional economic committee made up of Senate and House members will start discussing President Gustavo Petro’s tax reform. In a bid to fund social spending, the proposal targets commodities exports and the country’s wealthiest (up to 2 percent of Colombians who earn over COP 10 billion a month, or USD 2,300).
Why it matters. The reform would make Colombia the first Latin American OECD member to tax the wealthy.
- “It is not that rates are really increasing for individuals, but the possible deductions will be drastically reduced to roughly a third of what they are today,” explains Munir Jalil, executive director of bank BTG Pactual and chief economist for the Andean Region.
State of play. There is...