MercoPress. South Atlantic News Agency

Pepe Mujica against blanket VAT reduction

“It is difficult to take care of the treasury if we have the dignity to take care of the elderly,” Mujica underlined

Former Uruguayan President José “Pepe” Mujica said the Government's blanket cut to the VAT should apply only to the needy people; otherwise, it becomes a benefit to those who can actually afford to pay full tax.

Mujica thus opposed the proposal presented by Multicolor coalition members Cabildo Abierto of a general VAT reduction to 19 products of the basic basket.

“There are sectors that are not going to stop eating or suffer,” Mujica explained, as he called for measures focused on “those who have the worst purchasing power” and insisted “differentiated policies” helped to “have justice.”

Regarding the inflation above the Central Bank of Uruguay's target, Mujica rejected claims that the situation was due to the repercussions of Russia's invasion of Ukraine, saying the food crisis dates back to long before the military conflict. “Not everything should be blamed on the war in Ukraine, which has an influence, of course, but the world is experiencing a spiral, which are the rebounds of the decisions taken by the central world, the United States, Europe, which in response to COVID-19 flooded their respective economies with paper money, and now there are inflationary trends that are worldwide.”

Regarding dialogue between Uruguay's ruling coalition and the opposition Broad Front (Frente Amplio), the former President said: “I do not see a scope for dialogue, I do not see it because of the psychological framework of the government, because of the matrix.”

Mujica also explained President Luis Lacalle Pou and Broad Front leader Fernando Pereira did “have a conversation,” but that was very different from “dialogue.” The former president also admitted that “we have to get used to the idea that there are more and more old people because we are living longer,” so that “the problem facing our society and all societies is that inevitably there will be an accumulation of old people who will have to be maintained.”

“It is difficult to take care of the treasury if we have the dignity to take care of the elderly,” Mujica underlined. “Social security will have to be subsidized,” insisted Mujica, who also admitted such a problem will hardly be solved through adjustments.

Read also: Argentina has too many pensioners, according to an IMF report

The former leader opposed raising the retirement age. “Perhaps it is necessary to open the field to freedom” and make some areas more flexible, since “jobs are different”. “I think that a wise 70-year-old doctor

should continue working, or a teacher, but perhaps reducing the hours.” On the other hand, “a construction worker cannot walk on a scaffolding when he is 70 years old.”