On August 15th, the Cambio Radical party introduced a bill in Congress that proposes a tax reform. It is projected that in the coming weeks the bill will be assigned a committee in the House of Representatives so that it can begin its parliamentary process. The parliamentary blocs have until September 7th to define their political position in Congress: allied with the government, independent or opposition. So far, the Cambio Radical party has not officially declared its position (it is estimated that it could vary between pro-government or independent). Meanwhile, Centro Democrático, the ruling party, has not yet introduced its own bill, although President Ivan Duque has announced his intention to carry out a tax reform during his term (2018-2022). Due to the weight of Cambio Radical in Congress, it is expected that this bill will be taken into account during the negotiations for the drafting of the government-backed tax reform bill.      

The bill stipulates a reduction in the income tax rate for businesses, which would be reduced from the current 33% to 30%. In addition, the financial transactions tax (which stipulates a levy of approximately US$ 0.0014 per US$ 0.35 spent on all transactions) will be treated as an anticipated corporate income tax collection. The Industry and Commerce Tax (ICA) will also be treated as a tax break on the payment of corporate income tax. The ICA tax rate is up to the municipalities to decide and, as for commercial and service activities, establishes a monthly tax of between 0.2% and 0.10% on the average monthly gross income obtained in the previous year.

The elimination of all discounts on income is also proposed, with the exception of those for taxes paid abroad and resources donated to non-profit entities. Investment funds, unit trusts and mutual funds will be exempt from taxation. However, the profits or remunerations that the firms administering these funds obtain for their management will still be levied.