Tax reform: new proposals for its construction are proposed

A surtax on corporate income and an extension of the wealth tax, both on a temporary basis, are some of the proposals.

Establishing for two years the wealth tax for individuals and suspending the ICA discount in the income tax are ideas that the Andi likes.

José Manuel Restrepo, Minister of Finance, has said that he is willing to sit down with the different political and social actors to build the new tax reform.

“The initial idea is that with the new tax reform a figure of 14 trillion pesos will be collected.”

The initial idea is that with the new tax reform a figure of 14 trillion pesos will be collected to respond to social needs. One of the objectives is to achieve again investor confidence with fiscal stability, which from his point of view has always characterized Colombia in the world.

Restrepo will seek meetings with the risk rating agencies to which he will present the new action plan on how the new proposal is being built.

He stated that it is necessary to continue accompanying the most vulnerable in the midst of the pandemic, which is why this emergency income increase is needed not only for 3 million families, but for 5 million. The same applies to the VAT refund to increase the program from 2 to 4 million people.

Duque had already given stitches of the new tax reform

On May 2, 2021, the day that the President of Colombia, Iván Duque, ordered to withdraw the tax reform bill, he stated that, after listening to the citizenship, and including proposals from the Andi, the National Trade Council and the political parties, some lines of what the new document would have began to be known:

–Atemporary income surtax on companies.

– Temporaryextension ofthe wealth tax.

– Temporaryincrease ofthe tax on dividends.

–Anincome surtax on higher income individuals.

– Todeepen theausterity program of the State.

–Therewill be no VAT increase for goods and services.

– The current rules for the payment of income tax willnotbe changed.

Andi’s proposals are liked

In his statements to the media, Minister Restrepo stated that he found the Andi’s proposal interesting. In this regard, the businessmen propose the following:

1. tosuspend the measure of discount of the industry and commerce tax -ICA- in the income tax during the necessary period according to the results indicated by the medium term fiscal framework. Currently, the discount is 50% of the value paid for ICA and as of 2022 it would be 100%.

2.Defer the reduction of the general income tax rate according to the results indicated by the medium-term fiscal framework. The general income tax rate is currently 31 % and as of 2022 it would be 30 %.

3.Establish for two years the wealth tax for individuals. This would be a transitory tax only for individuals with net worth over 5,000 million pesos, with a rate of 1%.

4. Toadvance the disposal of the nation’s assets, which together could provide up to 15 trillion pesos to be used in the immediate financing of programs such as Solidarity Income and the Program to Support Formal Employment -Paef-, as well as short-term debt service needs.

In less than 18 months we will be debating another tax reform.

Through its document a href=”https://www.anif.com.co/comentarios-economicos-del-dia/otra-oportunidad-perdida-la-reforma-que-no-fue/” lang=”es” rel=”external” target=”_blank” title=”Another lost opportunity: the reform that was not”>Another lost opportunity: the reform that was not, published on May 3, 2021, Anif expresses its concern that due to political restrictions, the same mistakes of the past will be repeated and the same recipe that has been imposed for at least 20 years will end up being applied:

All this century we have spent this century making tax reforms (one every year and a half on average) to try to close a gap with temporary solutions.

For the entity, in less than 18 months we will be forced to be debating another tax reform, this time harsher and with less degrees of freedom, facing a different political scenario:

What is certain is that any government that wins the next elections, the first thing it will have to do is to process a reform of these characteristics.

Source: Actualícese