Ivan Duque, the frontrunner to win Colombia’s presidential election on Sunday, said tax cuts he is proposing would bolster investment in the Andean nation by a third over the next four years and help stimulate sluggish economic growth.
The right-wing 41-year-old lawyer and former senator, running almost 20 points ahead of leftist rival Gustavo Petro in polls, told Reuters in an interview late on Monday that he hopes to attract fresh investment to help lift economic growth to as much as 5 percent from 1.8 percent last year.
Petro, a former mayor of Bogota and one-time rebel from the now-defunct M19 insurgency, has spooked investors with plans to overhaul Colombia’s market-oriented economic model and gradually abandon dependence on the production of oil and coal.
Business-friendly Duque, on the other hand, has pledged to maintain crude and coal production, reduce taxes on businesses and raise government finances by cutting tax evasion.
“First of all, I want growth triggered by a high rate of investment, more than 30 percent of gross domestic product,” Duque said at his campaign headquarters.
“I know it’s ambitious, but that has to be a goal we set, domestic investment and foreign investment.”
Total investment reached 23.1 percent of GDP last year, up 0.6 percent from the previous year, according to the DANE statistics department.
Duque, who is backed by powerful former president Alvaro Uribe, said he would seek investment from infrastructure, agriculture, the service industry and tourism.
“Investors can have absolute clarity that my goal is for them to come to the country and that their investments translate into an improvement in the living conditions of Colombians,” he said, adding that he would guarantee the rule of law and clear investment rules.
The additional investment and a crackdown on tax evasion would help compensate for cuts in business duties, Duque said.
He also plans to reduce government spending and make it more efficient.
He said he believed his administration could cut value added tax and income tax evasion by 50 percent, allowing overall tax rates to come down and in turn attract more investment.
Duque, who worked at the Inter-American Development Bank in Washington until 2014, said he would abide by the so-called fiscal rule, which obliges the government to reduce the fiscal deficit, as well as cut debt levels in the $320 billion economy, Latin America’s fourth largest.
Colombia registered a fiscal deficit of 3.6 percent of GDP in 2017 and is expected to see it fall to 3.1 percent this year.