Colombian President Iván Duque has announced modifications to the bill for the Financing Law, now known as the Economic Growth Law. His announcement came after the meeting held in Government House with the authors of the report produced by the Congress joint economic commissions where the project is being processed. This report will be presented to Committee legislators for further discussion before voting. According to the Constitutional Court’s ruling, the regulations must be enacted before January 1, 2020, for them to dovetail with the Financing Law, which had been declared unconstitutional by the court.
Some of the modifications included are:
- Re-establishing the surcharge on financial entities as an extraordinary measure for 2020, 2021 and 2022 regarding income tax. By 2020, 4 percentage points will have been added to the general tax rate, leaving it at 36%. For fiscal year 2021, a further 3 percentage points will be added, leaving the tax at 34%. , while the following year another 3 percentage points will be added, leaving the rate at 33%.
- The establishment of tax normalization for 2020. When taxpayers repatriate undeclared resources from abroad to Colombia and invest them in the country, the taxable base of the complementary tax on tax normalization will correspond to 50% of these resources. The measure also levies a complementary tax of 15% of these resources.
- The creation of a committee to study current tax benefits and evaluate their relevance based on the principles governing the national tax system, proposing reforms aimed at maintaining those that are efficient, encouraging the reactivation of the economy.
- Obliging the National Government to submit to Congress a report on the effects of eliminating VAT and substituting it with the National Consumption Tax at a rate of 8%, within a maximum term of 6 months as from the sanction of the law.