On December 30, the Executive branch enacted the Economic Growth Law (2010/2019), after its passage through Congress on December 20 following a series of extraordinary sessions. Law 2010/2019 replaces the Financing Law declared unconstitutional by the Constitutional Court which became null and void after December 31, 2019. Even though the new law contains similar provisions to the Financing Law, several changes were introduced to the measure during its legislative process. The regulation is already in force.
The key amendments to the Financing Law are:
- The National Government must submit to Congress a report on the consequences of eliminating VAT and replacing it with a National Consumption Tax of 8% during a maximum 6-month period following the enactment of the law.
- The introduction of a standardization tax set to come into force in 2020. When taxpayers relocate non-declared assets outside the country back to Colombia and invest them in the country, the standardization tax base will be 50% of the total value of those assets. The new regulation also sets a complementary rate of 15% of the standardization tax.
- A Commission set up to study existing tax benefits in the national tax system, to assess feasibility and propose a reform to maintain tax benefits proven to be efficient, and to foster economic growth, based on the guiding principles of the national tax system.