Tax reforms latest publications
The tax reform includes social measures, mainly transitory, to mitigate the effects of the pandemic on the most vulnerable and raises revenues in COP15.2 trillion on a permanent basis. Of this, 70% from corporate taxes and the rest from anti-evasion and austerity. The fiscal rule is also reformed.
The Government submitted, the fiscal reform bill that includes social measures, mostly transitory, to mitigate the effects of the pandemic on the most vulnerable and raises tax collection by 15.2 trillion pesos permanently, of which 70% from corporate taxes and the rest from anti-evasion and austerity measures.
In the month of May, the economic growth of the first quarter of 2021 was known, surprising with levels close to the GDP of the end of 2019. However, the different negative events that occurred throughout the month require quick solutions to avoid disrupting the dynamism and recovery of the beginning of the year.
The latest political discussions within and outside of the Congress have placed the tax reform in uncertainty. It is necessary to reach agreements and quickly approve the best version of the reform in order to avoid negative effects on the economic recovery process along with investment and consumption decisions.
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.
The Growth Law is good in terms of formalization. It also brings the tax statute closer to international standards. However, it falls short in improving the distribution of the tax burden between companies and individuals and in increasing tax collection, while maintaining and extending exemptions.
They approved a new tax reform which they have named "Growth Law". I think that the reform does things that can indeed help us grow but also does others that perpetuate historical criticisms of our tax and social security contribution system.
The bill covers three main issues: VAT reform, a marginal increase in the tax burden on the highest earners, and a reduction in the tax burden on businesses.