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The Congress of Colombia approved this Thursday the president’s tax plan Gustavo Petrowhich hardens the burden on people with higher incomes and the mining and oil sectors.
“The reconciliation of the Tax Reform was APPROVED in plenary session of the Chamber (of representatives) with 122 votes in favor (and 27 against). It was ready for presidential sanction.” Interior Minister Alfonso Prada celebrated on Twitter.
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The initiative will allow the collection of some 20 trillion pesos (USD 4,000 million) in 2023, equivalent to 1.7% of GDP.
The resources will be allocated to the social programs encouraged by the first left-wing government of Colombia.
“It will seek to break the inertia of imbalance that puts Colombia as one of the 10 most unequal countries on the planet.” explained the Ministry of Finance in a statement.
With the approval of this reform, the taxes people with monthly income above 10 minimum wages (about USD 2,000).
It also set a surcharge on income tax that could go up to 15% for the oil sector and 10% for coal, depending on international prices.
Half of the expected collection will come from taxes to mining-energy companies.
The union alleges that its effective tax rate could reach up to 70%, compromising the viability of a sector that accounts for 57% of exports of Colombia.
The government, for its part, maintains that the current rate is slightly less than 30% and will rise to a maximum of 63%.
The tax reform also includes a carbon tax that taxes gasoline and other fuels at a rate of between 3 and 4 cents per gallon. These revenues will go to environmental programs.
Petro He assumed power in August with a plan of profound reforms that aim to strengthen the State, reduce poverty that punishes 39% of the 50 million Colombians, and narrow the gap between rich and poor, the widest in the region according to the index. of Gini inequality.
He also promised to leave behind the extractivist model to move towards agricultural production and tourism.
The president received finances hard hit by the pandemic, with a fiscal deficit equivalent to 5.6% of GDP for this year and a public debt of around 56.5%.
It also faces inflation that reached 12.2% year-on-year in October, the highest in more than two decades.
Source: Elcomercio
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