Colombia’s new government proposes $5.76 billion tax reform to Congress

By Carlos Vargas and Nelson Bocanegra

BOGOTA, August 8 (Reuters)Colombia’s new left-leaning government on Monday formally proposed to lawmakers a tax reform bill that would raise some 25 trillion pesos ($5.76 billion) in 2023 in a bid to boost revenue to finance anti-poverty programs.

Finance Minister Jose Antonio Ocampo said the bill would eventually add some $11.53 billion a year to government coffers, with revenue gradually increasing as parts of the legislation come into effect.

The funds, raised by levying more levies on high-income people and on basic commodities, will be directed towards an ambitious program of social programs, including anti-hunger efforts, free public universities and aid for people elderly without a pension.

Further details are expected in a new conference with Ocampo on Monday morning.

The reform would levy higher taxes on people earning more than 10 million pesos, or about $2,300, a month, institute a permanent wealth tax, and levy a tax on income from the sale of company shares. listed on the stock exchange.

The reform aims to increase taxes on coal exports, oil exports above a specified quantity and on gold production.

Petroleum and coal are the country’s main exports and sources of royalties. Petro has promised to ban all new oil development and move the country away from coal production in favor of renewable energy and tourism.

Petro’s promises are worrying some in the market, but the appointment of Ocampo – one of Colombia’s most famous economists and a longtime civil servant – could allay some fears.

Ocampo told Reuters in an interview last week that he will not “do crazy things or allow crazy things”, adding that it will be “impossible” for Petro to deliver on his promises without tax reform.

The reform would also tax sugary drinks, highly processed foods and single-use plastics.

The bill should be introduced with an urgent request from the department to facilitate its rapid passage, said Senate Speaker Roy Barreras, a member of Petro’s coalition.

($1 = 4,337.28 Colombian pesos)

(Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Jonathan Oatis and Alistair Bell)

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