“Tax reform in Colombia is going in the right direction: increase the taxation of natural persons, but still not enough. This should increase more in the medium term and will have to balance with corporate taxation, which is very large today.” Finance Minister Ricardo Bonilla said.
The 2022 tax reform raises taxes for individuals who earn more money as natural persons, through a drastic reduction in tax benefits that these individuals can access. Moreover, The reform established the wealth tax as a permanent tax and established limits on the expenses that companies can make on behalf of their executives or partners without paying this income tax in kind.
“The tax problem is something we have to dig into, which does not mean that we will present a new tax reform.” Bonilla clarified.
According to the official the effect of last year’s tax reform can only be assessed in mid-2024, when the declaration of natural persons is received in 2023.
In addition, the new finance minister was emphatic in that his administration will respect the achievement of the objectives and the fiscal rule; however, he warned that the country’s main challenge in this matter is the large deficit in the gas price stabilization fund, which last year exceeded 30 billion pesos.
“That means, or that Ecopetrol does not have a surplus if the country cannot finance it or that we are using social costs to pay for gas, and that is the problem we have today. So we will keep the fiscal rule, but we will be serious and consistent with the price of the gas problem,’ he added.
Bonilla has already reviewed the expected increase in gas prices before announcing the decision and this may happen this week, after the connection with former minister José Antonio Ocampo.
