Opposition senators are renewing criticisms of Uruguay’s new welfare transfer system, alleging it contains a hidden tax burden. Colorado Senator Bordaberry claims the system is a “trap,” mirroring concerns previously voiced by the Nacionalista Lema party. The core issue lies in how benefits are disbursed; receiving payments in cash subjects beneficiaries to Value Added Tax (VAT). This effectively reduces the net increase in income for recipients, negating some or all of the intended benefit. In some instances, critics argue, the VAT could even leave recipients worse off than before. The opposition alleges the system’s structure diminishes, or reverses, the financial gains promised to welfare recipients. They contend the indirect tax offsets the intended increase in financial support.