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The Academy of Political and Social Sciences rejects the Pension Protection Law

The Academy of Political and Social Sciences rejects the Pension Protection Law



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On May 15, the Academy of Political and Social Sciences issued a statement clarifying its position on the recently approved Law on the Protection of Social Security Pensions from Imperialist Blockade.

The Academy believes that the law is legally questionable and would have serious negative effects on the Venezuelan people.

He pointed out that Venezuela’s social security system is going through a serious financial crisis that cannot be solved by creating new tax burdens. He also stressed that the law imposes an additional tax on companies which is not only unconstitutional but will also discourage better salaries and non-salaries for workers.

The law also incorrectly delegates to the President of the Republic the power to determine the tax rate, which violates the principle of reservation. The academy also criticized the tax’s tax base, which it considers regressive and unfair.

Instead of approving this law, the academy urged the government to establish a permanent social dialogue on labor and tax issues He offered his artistic and academic cooperation To find solutions to the social security crisis.

Questions posed by the Academy of Political and Social Sciences

  • The law imposes an unnecessary tax that doubles the contribution to social security, which, in addition to being unconstitutional, will divert resources from the social security system to the national treasury.
  • The tax base of the tax is regressive and discriminates against the private sector, i.e. companies that pay better salaries will have to pay more tax, which will discourage better salaries.
  • The law gives the President of the Republic the power to determine the tax rate, which violates the principle of legal reserve and opens the door to assessment and political use of the tax.
  • The law does not take into account the existence of private retirement plans, which means that companies that already offer retirement plans to their employees will have to pay an additional tax.
  • The penalties stipulated in the law are excessively harsh, which constitutes a violation of the principle of proportionality, and may have a deterrent effect on investment and employment.
  • In this sense, the Academy called on the government to maintain a permanent social dialogue on labor and tax matters.
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