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© Reuters. FILE PHOTO: Colombia’s President Gustavo Petro looks on during a meeting with Venezuela’s President Nicolas Maduro at the Miraflores Palace in Caracas, Venezuela November 18, 2023. REUTERS/Leonardo Fernandez Viloria/File Photo
In an unexpected move, Colombia’s President Gustavo Petro suggested potential alterations to the tax reform that was put into place this year. He proposed a plan to reduce taxes for businesses while increasing them for wealthy individuals.
Petro emphasized that the changes would not aim to raise the overall tax revenue. The original fiscal reform, approved by Congress, aimed to generate an additional 20 trillion pesos ($5.23 billion currently) in 2023, with even more funds expected in the following years.
However, the intended goal was thwarted by a ruling from Colombia’s Constitutional Court, which overturned a law preventing businesses in extractive industries from deducting royalties from their taxable income.
“I encourage the business community to engage in discussions about potentially reforming the current tax legislation. It’s time to assess the impact of the congressional approval during this administration and evaluate it in terms of production,” Petro informed journalists.
According to Petro, the reform requires reassessment to enhance productivity. He suggested that a revised reform could lead to a reduction in corporate tax rates, while imposing higher taxes on the highest-earning individuals.
Earlier in November, Petro had warned that the Constitutional Court’s ruling could result in a decrease of about 6.5 trillion pesos ($1.7 billion) in Colombia’s tax income in 2024.
($1 = 3,822.05 Colombian pesos)