The Minister of Finance of Colombia, José Antonio Ocampo, presented this Monday (8) to Congress, on the first day of Gustavo Petro’s government, a tax reform project.
Ocampo said that “the reform has two main objectives, the first is to contribute to equality and social justice, and the second is to consolidate the fiscal adjustment”, and it is a priority for the new government.
The initiative is based on greater collection of taxes on individuals, the reduction of tax benefits for companies, the taxation of sugary drinks and the export of oil, coal and gold when they exceed a certain limit and the frontal fight against evasion and to evasion.
“This reform that we are proposing generates 25 trillion pesos a year (about R$ 29.6 billion), but we hope that, with the fight against tax evasion and evasion, this amount will rise to 50 trillion pesos a year ( around R$ 59.2 billion), which was what was said throughout the presidential campaign”, highlighted Ocampo.
If the bill is approved in Congress, where the Petro has a majority, the 25 trillion pesos would be equivalent to 1.72% of the Gross Domestic Product (GDP) in 2023.
The reform bill presented to Congress consists of five points, the first being “a tax on individuals who earn more than 10 million pesos per month (about R$11,900)”, a measure that also includes those who receive pensions above that amount.
“We do this basically by limiting the very broad tax benefits that these sectors have and also to correct some problems that are evident in our tax system”, stressed the minister.
Ocampo added that this proposal is complemented by a tax on the wealth of individuals who have more than 3 billion pesos (about R$3.5 million), which rises to 1% for assets of more than 5 billion pesos ( approximately R$ 5.9 million).
“The second is the fight against tax evasion and tax evasion, which are very high and the fight against these practices is very important”, he added.
The minister declared that, according to several studies, through evasion and evasion, the tax authorities lose “between 50 trillion and 80 trillion pesos” annually, which is equivalent to between R$59.2 billion and R$94.9 billion. .
“In terms of corporate taxes, we are also going to limit several tax benefits and, additionally, improve the simple regime to attract many more small companies, in an effort to formalize business”, he pointed out.
The third point of the reform is “a tax, a special contribution from the oil, coal and gold sectors, which are very important in exports, so that part of this benefit from high international prices is captured for the national tax authorities”, considered the minister.
“The effective rate of this tax will be proportional to the size of the positive price cycle and the extraordinary profit generated by it”, details the text presented to Congress.
The reform includes as a fourth element “the tax on sugary drinks and ultra-processed foods with a high content of added sugars”.
environmental taxation
The fifth point of the reform is of an environmental nature, called the carbon tax, which will be expanded to “internalize more effectively the social costs of the emission of greenhouse gases resulting from the consumption of fossil fuels associated with the development of the country’s productive activity” .
“Paradoxically, coal was excluded from the carbon tax,” said Ocampo.
The text presented today proposes “to change the basis of this tax, taxing the sale, import and removal of thermal coal, and keeping coal used in coke ovens excluded”, and clarifies that this tax will only be applied for internal consumption and excludes coal destined for export.
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