Taxes are contributions or tributes that individuals, companies and other entities must pay to the State so that it can finance its activities and public projects. These contributions are mandatory and must be paid according to the economic capacity of the taxpayer (individual or legal entity paying the tax). They are currently regulated by Law 1819 of 2016 and the Tax Statute and the authority in charge of their oversight and compliance is the National Tax and Customs Directorate (DIAN).
Taxes in Colombia
In Colombia the figure of taxes arose from the Spanish colony, at that time taxes were paid to the Spanish government to finance its activities in the territory. At the advent of independence, some colonial taxes were maintained and new ones were created and, over time, they have been created and modified in order to finance public spending.
The issue of taxes in Colombia has been booming in recent years for the following reasons:
- Tax reforms: the government has proposed several tax reforms in order to increase tax collection and improve public finances. These population reforms have been the subject of much debate and controversy and have generated diverse opinions on their effectiveness and fairness, and have even been the basis of multiple national strikes in recent years.
- Economic evolution: Colombia’s economy has experienced strong growth in recent years, which has generated an increase in capital on the part of citizens and companies, so the government has increased fiscal pressure to finance public projects and reduce the gap between social classes.
- Corruption and tax evasion problems: the country has been subject to multiple corruption and tax evasion scandals in recent years, which has raised concerns about the effectiveness of the tax rules and system and the government’s ability to administer and control taxes.
These situations have led to the modification and evolution of taxes in Colombia. At present, the main taxes in are:
- Income tax: it is levied on income earned by individuals and corporations.
- Value Added Tax (VAT): is levied on the consumption of goods and services.
- Stamp tax: it is levied on commercial documents and transactions.
- Tax on alcoholic beverages, sugar-sweetened beverages and tobacco: seeks to discourage their consumption.
- Property tax: it is levied on real estate property.
- Vehicle tax: levied on the ownership and use of motor vehicles.
As mentioned above, the payment of taxes is mandatory and failure to do so may result in penalties such as fines, seizure of assets and, in some cases, may result in legal proceedings. The competent authority to impose penalties and initiate legal proceedings in tax matters is the DIAN. It is important to emphasize that tax evasion and non-compliance in the payment of taxes can generate severe penalties and affect the reputation of companies and individuals, so it is advisable to comply with tax laws and regulations. tax obligations in the established time and manner to avoid penalties and legal problems.
- Law 1819 of 2016. (2016, December 29). Civil Service. http://www.secretariasenado.gov.co/senado/basedoc/ley_1819_2016.html
- Roldán, P. N. (2022, November 24). Economipedia. https://economipedia.com/definiciones/impuesto.html
- Decree 624 of 1989 – Tax Statute. (1989, March 30). Senate Secretariat. http://www.secretariasenado.gov.co/senado/basedoc/estatuto_tributario.html
- Taxes in Colombia. (n, f.). Invest in Colombia. https://investincolombia.com.co/es/como-invertir/impuestos-en-colombia#:~:text=Los%20impuestos%20de%20car%C3%A1cter%20nacional,y%20el%20impuesto%20de%20registro