Colombian government beats tax reform proposal

Colombian government beats tax reform proposal

The government of Colombia, represented by the Ministry of Finance, continues its meetings with members of Congress who are the rapporteurs of tax reform to agree on amendments to the articles that will not raise 25 billion Colombian pesos (about 5578 million dollars), as initially expected.

This week, new consensus has been reached on critical issues such as health taxes, hydrocarbons, the financial system, and heritage, among others. But those adjustments would have cost the government about 5 billion pesos ($1.115 million) than it had hoped to collect on the bill.

The coordinator of tax reform and the chair of the Senate’s Third Committee, Gustavo Bolivar, confirmed that the project would no longer raise 25 billion pesos, but 20 billion pesos ($4462 million). โ€œUntil Monday, when the meeting of the third joint committees of the Senate and the House ended, the reform was already at 20 billion pesos, because every sector asked to cut it a little bit and we agreed a lot and listened to all the unions.

But if royalties continue to be not deducted in the oil and gas sector, it will rise again to 23 billion pesos ($5,132 million),” the congressman said.

The same Finance Minister, Jose Antonio Ocampo, also acknowledged that the group would be less than the expected 25 billion pesos for next year, but did not specify the amount.

It will be just under 25 billion pesos, at first, but it will reach that target in year four. Ocampo confirmed that 50 billion pesos ($11,156 million) would be collected through tax evasion controls.

The most significant change was that announced for hydrocarbons, increasing the minimum rate at which the export tax would be charged, but more importantly, benefiting from the royalty deduction in income tax.

The Tax Office suggested in its original articles that royalties should not be deducted from the income tax liquidation of oil and coal companies. But the speakers and the government agreed to amend this article and change the non-deductibility of five additional income tax points.

This means that companies devoted to the exploitation of the subsoil of the state will not have an average of 35% of the simple system, but will increase it to 40%. If this change persists, his study will continue. Under pressure from President Gustavo Petro, the tax will be reduced by 3 billion pesos ($669 million).

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