Digital taxes, sugar-sweetened beverages and territorial tax collection

It is necessary to raise the property tax rate in order to increase revenue collection by territorial entities.

It is appropriate to tax income generated in Colombia by digital platforms.

A tax on sugary and sweetened beverages and ultra-processed foods is a necessary measure.

The national government has begun to uncover its cards on the issues to be discussed in the next tax reform: VAT for the entire family basket, increasing the number of taxpayers who declare and pay income and the carbon tax are some of them for the next bill.

In the article Urge a tax reform to mitigate the economic effects of the pandemic, published by De Justicia, it is stated that, for the Red de Trabajo Fiscal, the first step before starting to discuss a tax reform is that both civil society and academia have access to truthful information, and thus the process will be transparent.

“If the necessary data for the analysis of the tax system are not available, it will not be possible to have an equitable, progressive and efficient system”, warns the entity.

“the proposal is to make available to academia and society anonymized databases of income tax returns”.

On this point, the proposal is to make available to academia and society anonymized databases of income tax returns, and to add a gender box in the income tax return of natural persons.

“This would make it possible to understand the distribution of income and wealth in Colombia and to evaluate the equity of the tax system with respect to the treatment of women and men,” suggests the Network.

It is also important to have access to information on who receives tax benefits in Colombia, on the costs of these benefits for the State and on how many penalties for tax evaders were enforced.

“This would be fundamental to evaluate the equity and progressiveness of the tax system and to assess the effectiveness of the current sanctions”, the entity states.

Strengthening the collection of the territorial tax system

According to the tax collection for 2019, within the own resources of the territorial entities, the unified property tax represented 34% of the total. However, the average property tax rate is in a low range of 3 x 1,000.

This situation makes it necessary to raise the property tax rate in order to increase the collection possibilities of territorial entities.

“We propose to raise the average rate of the property tax according to the updating or not of the base, within the framework of the Autonomy of the Territorial Entities, that the National Government set a proposal to develop the multipurpose cadastre with integration of the Nation and that the institutional framework of the territorial entities and decentralization be strengthened in the framework of the economic crisis we are facing”, is the suggestion of the Network.

Taxes for the digital economy

Digital platforms in the midst of the crisis caused by the COVID-19 did not suffer, it was even a sector that increased its growth. From the Network it is thought that it is appropriate to tax income generated in Colombia under the concept of beneficiary of the digital service provided from abroad, to the extent that the beneficiary of the service is in Colombian territory.

Tax on sweetened beverages

For the Network, it is clear the need to implement public health policies of prevention and attention to overweight people in Colombia. Therefore, a tax on sugary drinks, sweetened and ultra-processed foods would be a measure not only appropriate, but necessary. The simple tax on sugary drinks with a rate of 24% could reduce obesity in lower income households between 5% and 10%, and raise – according to calculations of the Network – more than 1 billion pesos, which should serve to improve public health.

Source: Actualícese