The director of the National Directorate of Taxes and Customs (DIAN), Jose Andres Romero, announced details of the upcoming tax reform on which the President of the Republic Ivan Duque is currently working (Centro Democrático). The objective is to collect 25 trillion pesos (U$ 8,2 billion approx.) to address the country’s fiscal deficit (3.1% of GDP). The bill is expected to be introduced to Congress before it ends its legislative sessions 16th December.

The official said it will not be a tax reform per se, since the tax statute will not be modified, but a financing law. Romero did not confirm Duque’s proposal to reduce the income tax for companies from 33% to 30%. Rather, he argued that it would be appropriate to maintain this tax at 33% and modify other transactional taxes. In this sense, he alluded to the Financial Movements Levy (GMF, which stipulates a tariff of approximately US$ 0.0014 for every US$ 0.35 spent on any transaction), which would go from being an additional tax to an income tax collection mechanism.

As for natural persons, Romero pointed out that the entire family basket will be taxed with VAT, but that this tax will be gradually reduced from the current 19% to 16%. He also added that other income tax ranges would be created: the current ceiling of 33% will increase to 35% for those earning more than 28 million pesos (U$ 9,280 approx.) and to 37% for those earning more than 50 million pesos (U$ 16,600 approx.).