Backlash to Colombia Tax Reform Shows It’s Too Soon for Austerity
Violent protests sparked by the plan are a warning to other nations not to balance their budgets just yet.
A demonstrator stops in the middle of tear gas for several seconds, refusing to leave, to show her determination in Bogotá on May 1.
Photographer: Nadège Mazars/Hans Lucas studio
In the predawn hours of May 10, Colombian President Iván Duque flew to the city of Cali to try to quell protests that had become violent and blocked key roads. It was the latest repercussion from a planned reform that’s become a political disaster for the government—and a warning sign for other countries.
After borrowing heavily during the pandemic, Colombia moved faster than many developing-nation peers to get its financial house in order, announcing a new tax reform bill on April 15. Duque promised it would trim deficits and help the poor by increasing the burden on middle-class and wealthy individuals at a time when the country’s poverty rate is surging. The measure, set to take effect in 2022, was meant to convey discipline and reassure investors. Instead, the blowback was fast and fierce: nationwide protests, more than 40 people dead, and the country’s finance minister out of a job.