Due to insecurity and extortion, 60% of entrepreneurs in Colombia are considering leaving the country, Fenalco said.
The National Federation of Traders (Fenalco) has revealed that 60% of entrepreneurs in Colombia have considered leaving the country in the last two years.
This concern arises amid growing insecurity, extortion and uncertainty caused by pending tax and labor reforms.
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During the National Congress of Fenalco Traders held in Barranquilla, The union presented the results of a survey that tried to capture how its members perceive the situation of their companies and the countryafter two years of the current government. According to the federation, the main problems faced by traders include increased taxes, uncertainty and a lack of regulatory stability.
Jaime Alberto Cabal, president of Fenalco, emphasized that the business climate has not improved and business expectations remain at critical levels. Only 16% of members implement their investment projects for the second half of the yearwhile 25% have definitely abandoned their investment plans for the rest of the year.
“It is a reflection of the environment of uncertainty and mistrust existing in the business sector, given the behavior of the economy and due to the perfection of the increase in uncertainty and extortion”they stated from Fenalco.
The survey also revealed that insecurity and extortion, along with uncertainty about the new tax reform, are emerging factors that were not previously highlighted. These problems have slowed investment plans and created a negative outlook for private sector employment growth.
As of 2022, more than a million Colombians have left the country, according to official figures. Fenalco emphasizes that the uncertainty surrounding the reforms discussed in the Congress, low demand and physical uncertainty are the main problems that are bothering entrepreneurs today.
Besides, Fenalco pointed out that measures such as the elimination of the simple tax regime, the introduction of electronic invoices for small businesses and the creation of a healthy tax significantly affected the stability of segments such as food, cafes and restaurants.
Political uncertainty and security are the main concerns of Colombian entrepreneurs, according to a recent report by Fenalco. Less than two years after the end of the reign of Gustav Peter, 24% of the interviewed entrepreneurs expressed concern about the political situationwhile 21% expressed concerns about security in the country. Furthermore, the labor reform concerns 18% and the tax reform 16% of the respondents.
Regarding the measures that the government should take to support business activity, 24% of business owners believe that security should be improved. 20% suggest proposing a reactivation plan together with entrepreneurs, while 17% believe that no further tax reforms should be presented. 14% advocate the abolition of the labor reform project.
Factors that generate uncertainty and slow down investment were also highlighted in the survey. Tax increases are a concern for 19% of business owners, followed by citizen safety at 16%, lack of stability in regulations at 15% and a decline in demand at 13%.
Fenalco detailed that the current situation is significantly affecting business confidence. The survey reflects that political uncertainty and reforms proposed by the government are creating a worrying environment among entrepreneurs that could have a negative impact on investment and economic growth in the country.