The economist and former president of the Central Bank of Uruguay (BCU), Julius Brungave explanations about how he would apply the measures proposed by the Colorado pre-candidate and former president of Antel, Gabriel Gurméndez, about the decrease of Social Security Assistance Tax (IASS) and the Personal Income Tax (Income Tax).
On the same day, the former president of Antel proposed to reduce the IASS and the Income Taxas well as the elimination of the monopoly of Ancap, facing the elections 2024. With this, the former president of the BCU gave explanations about how this measure would be carried out.
Taxes would be lowered by 2026
According to De Brun, it is necessary to reverse the processes of permanent accumulation of spending. “No one ever checks the spent down. They start new projectsbut always with what is previously there and without redirecting spending towards what is priority and leaving aside the rest,” the economist explained to Radio Carve.
The politician assured that from the social security reform which allowed this component of spending to be stabilized. “There is an important part that, as a percentage of the product, would remain stable and we could concentrate on the rest,” he remarked. With the assumption decrease in spending, Savings of around 1,000 million dollars would be generated, according to De Brun.
“The rule is that, regardless of the growth rate, half of those savings They are destined for tax reduction,” he commented. “After the year 2025, the evolution of income and expenses for that year is made and the savings. From there, the proposal is made for the tax reduction during the year 2026,” he added.
Regarding the process of reducing the tax, De Brun explained that these would be lowered as resources are recovered and do not remove them suddenly. “Half of saving would be used to reduce taxes and we will adjust the parameters year by year in order to return to the population part of this tax burden,” he commented.
Why lower the personal income tax and the IASS?
The politician participating in the economic group of the Colorado pre-candidate assured that, especially the Personal Income Tax, punishes the middle class and prevents them from saving. “In the case of income tax there are components that worry me. One of them is that they imply a punishment to the saving capacity of the middle class, which is where the majority of the tax collection is located. collection since their backs are fast in terms of rate growth and above all relatively low income bracket for income in Uruguay,” he explained.
“In a country where we have introduced many tax benefits in favor of capital investments, in investments In human capital, we penalize it more when it is of better quality to the extent that we apply increasingly higher rates,” he added.
Regarding the IASS, De Brun described it as “more than a tax, “revenge.” According to the economist, this tax falls on a part of the population which already suffers from a significant reduction when the calculation of the liabilities on income that was already recorded by personal income tax is made.