Weekly Report - 14 October 2003

COLOMBIA | More taxpayers, lower receipts. Despite having broadened the taxpayer base by 33%, to 600,000, Colombia's tax-collecting agency, Dian, has found itself collecting US$190m less than it had estimated — a most inconvenient development when the fiscal deficit is already headed for 2.8% of GDP, or half a point more than what had been agreed with the IMF. Dian's director, Mauricio Aranguren, has ventured that the low receipts might reflect lower sales.

The Uribe administration is gambling on a drastic enlargement of the taxpayer base to boost fiscal receipts. It has put before congress legislation that would lower the filing threshold for the value-added tax (IVA) by 67%, to US$13,843, and the one for income tax by 52%, to US$24,000. It also intends to farm out to private enterprise the collection of tax arrears, currently US$796m. Tax evasion in Colombia is estimated at 30% of liabilities — about US$2.4bn.

VENEZUELA | Unemployment rate shrinking. There is as yet no sign of the job-creating drive which, according to President Hugo Chávez , will bring down Venezuela's open unemployment rate to 13% by the end of this year. What there has been is a trend turnaround. Between July and August the rate shrank by half a percentage point (some 40,000 people), to 17.8%. The national statistical institute, INE, reports 9.9m people in formal employment in August, and 5.2m working in the informal sector.

The average unemployment rate in the first half of this year was 19.3%, compared with 15.5% in the same period of 2002.

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