Petro will raise taxes on the richest 1% of the country’s population to allocate 11.4 billion to social equality

The Government of the Colombian president, Gustavo Petro, presented this Monday his project of Tax Reform, the day after the inauguration of the new head of state. The initiative has a clear redistributive desire and intends to raise some 50,000 million pesos, that is, around €11.4 billionin the next four years.

The center of the reform will be taxes on the income of individuals, the payment of more taxes by the 1% of Colombians, the richestand review of current tax exemptions.

The reform provides for an increase in income tax for people with income greater than 10 million pesos per month -2,270 euros- and reduce the amount of exemptions for savings accounts.

Regarding the wealth taxthey will begin to pay taxes on capital from 3,000 million pesos –€670,000– and those of 5,000 million -1.13 million euros- will pay 2%. The tax on occasional earnings would go from 10% to 20% and in the case of free zones, a minimum exports in order to maintain the tax benefit that exempts them from paying the 35% tax.

The reform also includes the so-called “healthy taxes” for the sugary drinkss depending on the proportion of sugar, and for ultra-processed foodsand imposes rates on psingle use elastics. In addition, it eliminates tax incentives for large companies that are considered unnecessary.

It also plans to put an end to the “day without VAT” promoted by the previous government because “it mainly benefits the high income sectorswith consumption and savings capacity, so its elimination promotes a more equitable tax systemAccording to the new government.

In addition to the above aspects, the reform also contemplates plus oil export taxescoal and gold when they exceed a certain ceiling, and a lfront fight against avoidance and evasion fiscal

Petro’s new finance minister, Jose Antonio Ocampopresented the reform in Congress on Monday, affirmed that it is a priority for the Government and that it intends to “contribute to the equality and justice social”, and “consolidate the fiscal adjustment”.

“This reform will generate 25 billion pesos annually [unos 5.650 millones de euros]but we hope that with the fight against tax avoidance and evasion that amount will rise to 50 billion pesos a year, which is what was discussed throughout the presidential campaign,” Ocampo assured. That amount represents 1, 72% of Colombia’s gross domestic product (GDP) forecast for 2023.

“The reform obeys the higher criterion of obtaining the necessary resources to be able to implement the president’s government plan Gustavo Petro and the vice president France Marquez“, said the Minister of the Interior, Alfonso Prada.

President Petro considers that this bill is a “priority” for the new government, for the bench of the Historical Pact – the official bloc -, and for the parties that form the coalition in power, according to Prada.


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