Controversial Reform

Colombia’s 2023 tax reform has been one of the most controversial issues in recent months.

Since its presentation, it has generated criticism from civil society, businessmen and some political sectors.

Your Objective

The purpose of this reform is to raise more resources to finance public spending and reduce the country’s fiscal deficit.

However, many consider that the proposed measures are unfair and will negatively affect the country’s economy.

VAT increase?

One of the most controversial aspects of the tax reform is the increase in VAT on some goods and services, including hotels and airline tickets, which will again have a VAT rate of 19%.

Also, the VAT exclusion and the exemption from tariffs and national tax on gasoline and Acpm in border areas were eliminated.

VAT-Free Day is coming to an end

In addition, with respect to the VAT-Free Day, the National Government indicated that it will not be held.

Income Tax

Another of the most discussed points of the reform is that of taxing the income of individuals earning more than $10 million per month.

According to the government, this measure seeks to increase the progressiveness of the tax system and reduce the gap between rich and poor.

However, some businessmen and economic experts have warned that this could discourage investment and negatively affect the country’s economic growth.

Reducing Tax Evasion

Tax reform also includes measures to reduce tax evasion, such as the obligation to declare assets held abroad, the strengthening of the DIAN (Dirección de Impuestos y Aduanas Nacionales) to combat evasion and smuggling, and the use of technology as a key factor through electronic invoicing.

These measures have been welcomed by some sectors, as tax evasion is considered to be one of the main problems of the Colombian tax system.

Other Taxes

However, another important aspect of the tax reform are the taxes on ordinary exports, sugar beverages, which will be taxed based on the sugar content in grams per 100 milliliters of beverage and ultra-processed beverages, which will be taxed at 10%.

Taxes were also imposed on single-use plastics and carbon.

Conclusion

Colombia’s 2023 tax reform has been very controversial and has generated a great deal of criticism and protests throughout the country.

It is expected that with the entry into force of this reform, 20 billion will be collected, of which 11 billion will be contributed by the mining and energy sector, 4 billion by legal entities and 1.3 billion by individuals.