Published on Friday, February 28, 2020 | Updated on Friday, February 28, 2020

Colombia | Lights and shadows of the tax reform

Last week I was in Cali participating in a panel about growth law or tax reform approved at the end last year in the seminary of ANIF-Fedesarrollo for which I did a reading and organizing the big topics.

Key points

  • Key points:
  • I think those light topics are so important for today, but most of all for the future of growth and productivity.
  • Within the light topics, I want to highlight everything that has to do with the companies and personal formalization. Particularly, the simple regime that as its name suggests, simplifies the relationships of commercial establishments and professional services with the tax system.
  • Another light topic, I want to emphasize is that the reform brings us as a country closer to international standards with a lower income tax rate for companies and a VAT discount for the purchase of capital goods.
  • Within the shadow topics, I would like to highlight that this reform makes taxation more complex with new exemptions, which at the same time, makes it more difficult to control taxation and break up with the principle of equality.
  • Another shadow topic is the additional inflexibility the reform imposes to public spending with the specific destination of tax revenues or directly of spending.

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