Congress of Colombia approves the tax reform, the great campaign promise of Gustavo Petro

The House of Representatives of Colombia approved this Thursday the tax reform presented by the Government, which is the green light for this rule with which it is intended to raise 20 billion pesos (about 4,000 million dollars) next year for “equality and social justice”, in the words of the president Gustavo Petro.

The debate in the Lower House, which began on Wednesday and lasted until Thursday night, managed to save the bill with some changes to the one initially presented and adds to the positive vote that the Senate also gave on Wednesday after 15 hours of debate.

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“Is tax reform In the first place, it is a great contribution to the change that the national government intends to forcefully advance”assured in the Congress finance ministerJose Antonio Ocampowho added that the rule guarantees “a solid fiscal policy” and guarantees that there are “additional resources to be able to promote social peace.”

After 10 hours of discussion, where the taxes on ultra-processed foods or the surcharges on oil companies have been the most sensitive issues, the congressmen approved with 125 votes in favor the “fairest and most social tax reform in history”in the words of the president of the House of Representatives, David Racero.

CHANGES AFTER THE DEBATE

Initially the government sought to raise 25 billion pesos (about $5 billion) with the reform, but the changes made to the bill reduced a fifth of that figure.

“Here we have resources for the comprehensive social reform that the peace agreement talks about, which is a very firm commitment of this Government, we will have resources for peace, to expand health, education and housing programs, for aqueducts (…) and to boost the popular economy that is absolutely essential for profound change”explained the Minister of Finance.

In the last weeks and during the debates some of the initial proposals changed. Two of them, for example, are that High pensions will no longer be taxed and the oil and coal surtax will be applied based on the international prices of hydrocarbons.

The text approved in the Chamber includes peculiarities such as a tax on single-use plastics and digital platforms or removing VAT from movie tickets, theater, sporting and cultural events, but it became entrenched again in the issue of royalties and surcharges to the oil companies, which after much discussion remained as the initial project presented by the ruling coalition.

Namely, oil tankers and miners may not deduct royalties and there will be a surcharge of a maximum of 15% for hydrocarbons and 10% for mining, as was already set on Wednesday in the Senate.

The other complicated point on the table was to tax ultra-processed foods and sweetened beverages, a tax that was postponed until November 2023, which differs from what was approved on Wednesday in the Senate, which excluded products such as bread or some dairy products and postponed the application of said rate for beverages to July 2023 and for food to September of the next year.

The tax on higher pensions, considered by some sectors as unconstitutional as they consider it an acquired right and not a source of income, was one of the most controversial points of the reform and was finally eliminated for both cameras.

The text of the Chamber must now be reconciled with the one that was approved in the Senate, which differs in three articles, which is expected for next week and from there it can go to presidential sanction to enter into force.

Source: Elcomercio

Ronald Payne

I, Ronald Payne, am a journalist and author who dedicated his life to telling the stories that need to be said. I have over 7 years of experience as a reporter and editor, covering everything from politics to business to crime.