In Colombia, Tax-Free Holidays Lead Critics To Decry 'COVID Friday'

Jun 28, 2020
Originally published on July 2, 2020 9:32 am

After imposing one of the tightest coronavirus lockdowns in Latin America, Colombia is now searching for ways to jump-start its economy. One experiment is a series of tax-free shopping days, but critics fear they could turn out to be super-spreader events.

At a time when the country is facing a spike in COVID-19 cases, urging Colombians to flock to stores and malls "sends an erroneous message," said Bogotá Mayor Claudia López.

Sales tax in Colombia is a whopping 19%, so it was a big deal when the government designated three days this summer as tax holidays. The idea is to convince Colombians who had largely been confined to their homes for the past three months to venture out — and open up their wallets.

They did just that on Friday, June 19, the first of the three tax holidays. At many stores, mobs of shoppers turned out in a Black-Friday-like frenzy. Retail sales jumped five-fold, according to the Colombian government, prompting President Iván Duque to declare the event a roaring success.

But the crowds were so large that social distancing went out the window and officials had to close down 86 stores nationwide. Bogotá city official Luis Gomez went into one crowded electronics store and personally ordered customers to leave.

"People need to understand that it's not worth risking their lives for a discount," he told reporters.

Colombia has registered more than 2,500 deaths from COVID-19, according to tracking by Johns Hopkins University. That is far fewer than neighboring Brazil, Peru and Ecuador. Still, the virus is surging in Latin America and health officials in Colombia say it's no time to slack off.

Indeed, the shopping spree came just as Colombia registered its highest daily rate of new infections and deaths. That prompted López, the Bogotá mayor, to label the spending free-for-all "COVID Friday." She suggested the tax holidays should be for online shopping only.

Guillermo García, a Bogotá lawyer who stayed home for the tax holiday, said it makes no sense for the government to first promote extreme caution through tight lockdown measures, only to then turn around and promote crowding in the name of boosting the economy.

"I think all the sacrifices we made over the past three months will be lost," he said.

So far, there are no plans to cancel the two remaining tax holidays scheduled for July 3 and July 19.

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NOEL KING, HOST:

Colombia imposed one of the tightest coronavirus lockdowns in Latin America. About 3,500 people have died from the virus there, which is significantly fewer than some of the countries that border it. But its economy took a hit, so Colombia's trying to juice it with some tax-free shopping days, which some people worry could be superspreader events. Here's John Otis.

JOHN OTIS, BYLINE: Sales tax in Colombia is a whopping 19%, so it was a big deal when the government designated three days this summer as tax holidays. The idea is to convince Colombians, who had largely been confined to their homes for the past three months, to venture out and open up their wallets. On Friday, June 19, they did.

(SOUNDBITE OF YOUTUBE VIDEO)

UNIDENTIFIED PEOPLE: (Crosstalk).

(SOUNDBITE OF SIREN)

OTIS: In this video posted on YouTube, shoppers pushed their way into a big-box store in Bogota called Alkosto. The Black Friday-like frenzy was repeated all over the country. Retail sales jumped fivefold, prompting President Ivan Duque to declare the event a roaring success.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT IVAN DUQUE: (Speaking Spanish).

OTIS: "The results have been very good for the economy," Duque said in a televised speech. But health officials were horrified. The crowds were so large that social distancing went out the window and officials had to close down 86 stores. Bogota city official Luis Gomez went into the Alkosto store and personally ordered customers to leave.

(SOUNDBITE OF ARCHIVED RECORDING)

LUIS GOMEZ: (Speaking Spanish).

OTIS: "People need to understand that it's not worth risking their lives for a discount," he said.

Due in part to its strict lockdown, Colombia has registered far fewer COVID-19 cases than neighboring Brazil, Peru and Ecuador. Still, the virus is surging in Latin America. And Colombian officials say it's no time to slack off. Indeed, last month's spree came just as Colombia registered its highest daily rate of new infections and deaths.

(SOUNDBITE OF ARCHIVED RECORDING)

CLAUDIA LOPEZ: (Speaking Spanish).

OTIS: Bogota Mayor Claudia Lopez denounced the spending free-for-all as COVID Friday. She said the tax holidays should be for online shopping only.

(SOUNDBITE OF ARCHIVED RECORDING)

VOICE RECORDING: (Speaking Spanish).

OTIS: Meanwhile, the Bogota Alkosto store that was closed down has reopened. At the entrance, loudspeakers broadcast messages urging customers to wear masks and maintain social distance. With prices back to normal, there's only a trickle of customers, including lawyer Guillermo Garcia (ph).

GUILLERMO GARCIA: (Speaking Spanish).

OTIS: He says, "it makes no sense for the government to first promote extreme caution then prod people into crowded shopping malls." He adds, "I think all the sacrifices we made over the past three months will be lost."

Since June 19, COVID cases have spiked, but the government hasn't called off tomorrow's tax holiday or the third scheduled for later in the month.

For NPR News, I'm John Otis in Bogota, Colombia.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.