Uruguay minister responds to senator's 'trap' accusation over child poverty transfers

A proposed reform to Uruguay's monetary transfer system, included in the government's budget accountability bill, is facing scrutiny from opposition figures. Senator Pedro Bordaberry has voiced strong objections, labeling the changes a "trap" for families with children living in poverty.

Bordaberry argues that under the new unified program, which aims to increase benefit amounts, recipients will lose the value of the increase because they will be required to pay Value Added Tax (VAT) on purchases. He contrasts this with the current Tarjeta Uruguay Social (TUS), which exempts VAT.

"When you buy with TUS, you don't pay VAT, but now, as the government wants, beneficiaries will pay VAT, so they will be given an increase on one hand but taken away on the other," Bordaberry stated, criticizing what he called the "Frente Amplio's trap with transfers."

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When you buy with TUS, you don't pay VAT, but now, as the government wants, beneficiaries will pay VAT, so they will be given an increase on one hand but taken away on the other.

He further questioned the lack of a requirement for children to attend school to continue receiving benefits, asking, "Where have we ever seen that we are discussing that in Uruguay?" Bordaberry also expressed concern about potential misuse of funds by individuals other than mothers, suggesting that cash disbursements might be more susceptible to this than card-based payments.

Juan Martín Fernández, director of Transfers and Data Analysis at the Ministry of Social Development (Mides), responded to Bordaberry's claims. He assured that all families using the economic aid would be able to exempt VAT on their purchases by using a dedicated card. Fernández clarified that while cash disbursement will be an option, it is not mandatory, and the VAT exemption remains available through the card system.

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Where have we ever seen that we are discussing that in Uruguay?