Colombia is the seventh most unequal country in the world and second most unequal in Latin America, according to the country’s President Juan Manuel Santos and the World Bank.
“This situation is totally unacceptable,” said Santos, adding that tax reform would soon be implemented aimed at tackling inequality.
Colombian inequality levels are comparable to that of Haiti or Angola, according to financial publication El Dinero, which interviewed the senior economist of the World Bank in Colombia, Lars Christian Moller.
According to Moller, a more progressive tax system in which richer households contribute more than poorer households, and a greater focus on the transfer of public resources to poor Colombians, could bring the country’s inequality levels to that of Chile or Costa Rica.
President Santos said Thursday that less than 2% of Colombian adults pay income tax, owing to a high personal income threshold.
“The existence of range of tax exemptions which benefit specifically those with high incomes, weakens the tax base,” said the head of state.
