He presidential candidate of the National Party (PN), Alvaro Delgadoassured that if the plebiscite to repeal the law is approved, social security reform that drives the PIT-CNTshould be raised by about “3 or 4 points” Value Added Tax (VAT).
In the last few hours, the white presidential candidate held a press conference in Paysandú that, according to the opinion of “some economists”, if the PIT-CNT ballot is successful, the country would be forced to increase the tax burden.
“This is what this plebiscite generates, it undermines the system, it defunds it,” Delgado attacked the intentions of the PIT-CNT and warned: “it must be said in these terms, if this plebiscite is successful, There is no possibility of paying pensions to workers“.
In this regard, Delgado stressed that if approved, “it would also cause an economic collapse” and that “VAT would have to be raised by 3 or 4 points in December.”
The Multicolor Coalition is heading against the PIT-CNT plebiscite
Delgado’s words are in line with the recent statement by the Colorado Party (PC), partner party of the Multicolor Coalitionwhich explains that the constitutional reform aims to avoid deepening the mixed system and “pushing Uruguay over the edge.”
The Colorado report defends the constitutional reform of 1996 and warns that if voted in favor, there will be “legal chaos” in the country with multimillion-dollar lawsuits against the State, as well as loss of investment grade.
“The promoters of the reform intend, as a starting point, to repeal the mixed regime“, continues the text that assures that since the PIT-CNT “They are pushing to establish the minimum retirement age at 60 years, established almost 100 years ago by a law of 1925 (when life expectancy was 50 years and a few)”, when today it is above 80 years.
“They also intend to assimilate the retirement either minimum pension with the national minimum wage“, the letter recalls and adds: “Beyond its cost, estimated by economists of different ideological orientations at more than 1,000 million dollars annually – 1.3% of the GDP -, which nobody knows how it will be financed, it is an invitation and an incentive to any future government not to adjust the national minimum wage, so as not to have to face expenditures that deteriorate the public accounts.”
On the other hand, they note that “with a replacement rate of 45%, any person whose nominal salary is less than 49,484 pesos will receive said minimum retirement salary, so the incentive to evade increases significantly.”
They also recalled that the Social Security Bank (BPS) indicated that the overall system deficit would fall by 4% of GDP, implying an additional 3.1 billion dollars.
Source: Ambito
