In this text, the technical vice president of Asobancaria presents his perspective on the growth of added value and the tax contribution of these activities in the country.
In times of crisis, debates on the contributions of the productive sectors to economic reactivation and development are the order of the day. From the banks we are optimistic and we are open to building a country with all the different actors on the basis of our contribution to the economy and the reactivation.
The behavior of the financial sector GDP is often a source of misinterpretations **. It is wrongly pointed out that the growth of the sector indicates the dynamics of its profits, when its GDP generation is measured by the growth in credit irrigation, a key element for the economy, particularly in years of contraction. More credit for Colombians is an essential tool to contain crises such as the one unleashed by COVID-19.
In this line, the real growth of the added value of financial activities in 2020 (2.1%) and in the first quarter of 2021 (4.9%) was mainly related to the work of intermediation and liquidity irrigation in a period in which households and companies experienced a significant reduction in their income, all without affecting the savings of Colombians. It is satisfactory that the country has been able to count on a solid banking system during this difficult period that, with the support of the FNG and the rediscount lines, has been able to respond to the needs of its clients, facilitating the recovery of income and employment as has been done. seen in sectors as important as housing construction.
Regarding the contribution to the economy in the midst of the pandemic, it should be noted, on the one hand, that the financial sector granted new credits worth $ 396 trillion (39% of GDP) between March 2020 and May 2021, and on the other, that with the support of the supervisory authorities it was able to take measures to mitigate the effects of the economic crisis. For example, in the Debtor Support Program (PAD), between August 1, 2020 and May 19, 2021, benefits had been granted to more than 2.2 million people and companies, with positive impacts such as a reduction of the installment of up to 27.7%, an average extension of the term of 33 months, an interest rate reduction of 179 basis points and additional grace periods of up to six months (see attached table).
In tax matters, the contribution of the sector is also important, contrary to what the constant indications towards it say. Taxation as a proportion of the added value of the sector is one of the highest in the economy. According to DIAN figures, the financial and insurance activities sector paid nearly $ 4.6 trillion in income tax in taxable year 2019, equivalent to about 11.5% of the total collection, with which Its relative participation within the collection represented 2.4 times its weight within the economy (4.7%), surpassing other branches of activity such as commerce, industry, construction and agriculture, thanks to the high degree of formality of the sector.
Follow the news of El Espectador on Google NewsIt is also appropriate to specify that the effective total tax rate of the Bank, accounting for the payment of taxes such as income, VAT, GMF, ICA and property, among others, is around 50%, very close to that of the total of the economy.
On the other hand, thanks to the investments in technological innovation that the entities have made in recent years, as well as the arrival of new players to the market, the average intermediation margin has presented significant decreases in the last decade, going from close to levels to 9% in 2010 to levels of 6.7% today, which puts it below the average for the region and many of our regional peers. This fact is very beneficial for the users of the system and has led to the average profitability of banking entities in Colombia having remained below that of regional peers such as Brazil, Mexico and Peru during the last four years.
The financial sector is committed to the economic and social recovery of Colombia, and is willing to continue contributing to the purpose of overcoming the crisis without losing sight of the major objectives of improving the offer of value to its clients and increasing financial inclusion. We welcome the debates on the sector that can be carried out on the basis of the figures, which everyone can access, and that in this way we can build arguments and ideas that result in benefits for the users of the system and the country.
* Technical Vice President of Asobancaria.
** Guevara, D. “Financial sector: Do those that grow the most pay enough tax?”. El Espectador, May 26, 2021.
