Colombia | Trading
Colombian coffee growers celebrate the announcement that coffee will not be taxed with 19% VAT
The union representatives have called not to tax the inputs of coffee and other agricultural products, because this would raise production costs, which in turn would be passed on to consumers and therefore discourage coffee consumption.4/8/2021
The Steering Committee of the National Federation of Coffee Growers of Colombia (FNC) welcomes President Duque's announcement not to tax coffee with 19% VAT.
Previous pronouncements by government officials had aired the possibility that coffee would cease to be considered a basic product in the diet of Colombians and would substantially increase its taxation.
In its ordinary session, the Steering Committee in a virtual meeting held yesterday to analyze conjunctural issues of the sector, the highest representatives of the coffee union expressed their satisfaction at the announcement of the President and thanked the many samples of support to the sector in rejection of an eventual increase in the VAT for the country's flagship product.
“With great satisfaction we register the declarations of President Iván Duque in which he affirms forcefully that there will be no increase in the VAT levy on coffee. It seems to us that justice is done to the wishes of the coffee growers and the Colombian people, ”express the members of the Steering Committee via the General Manager of the FNC, Roberto Vélez Vallejo.
“On behalf of the coffee growers of Colombia, we would like to thank all the manifestations of rejection that came from the entire political and social establishment against the increase in VAT for coffee. It gives us strength to know that we have the support of Colombians ”, they add.
The highest union representatives also made a call not to tax the inputs of coffee and other agricultural products in general, because this would raise production costs, which in turn would be passed on to consumers and therefore discourage the consumption of coffee, a second drink. most consumed in the world.
“Let us remember that 540,000 families derive their livelihood directly from this crop, a key engine of the economy that has been a factor of social stability in large areas of the country and that, in the particular case of the year of the pandemic, proved to be a lifeline for broad sectors of the population, ”noted the union representatives.
Raising domestic consumption, a priority
President Duque's pronouncement also corroborates the commitments of his own government to increase domestic consumption of coffee and support the sector as a whole.
It is worth remembering the spirit of current laws that promote public purchases of local agricultural products, such as Law 1955 of 2019, or Law 2046 of 2020, which favors the participation of peasant, family and community agriculture in the public procurement markets of food.
This is not to mention budding initiatives such as Bill 065 of 2019, which seeks to contribute to the well-being of the coffee sector, encourage internal consumption and declare coffee as a national drink.
Coffee growers, a vulnerable population
Added to this is the fact that, despite the important cushion that coffee institutions represent for all producers (with all the public goods and services that it provides, such as purchase guarantees or technical assistance), these continue to be a population vulnerable to low prices and the ups and downs of international grain prices.
According to information from Sisbén IV, currently 54% of coffee growers are in a situation of poverty and / or vulnerability: 15.6% in extreme poverty (their household income is not enough to purchase the basic food basket); 25% are in moderate poverty (their income does not allow them to purchase basic goods and services) and 13.8% are vulnerable to falling into or returning to poverty.
On the other hand, 68.9% of coffee producers have barely reached primary education, 77.4% live in homes that need a home improvement due to deficiencies in their housing conditions, and 63.9% belong to a beneficiary household of Monetary Transfers of the National Government of Colombia.
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