The new Colombian government submitted to the Congress an ambitious tax bill aiming to tackle poverty and inequality. The reform is expected to increase revenue collection by 1.7% of GDP in 2023 and, among other measures, targets the tax expenditure system.
Some of the main tax expenditure-related proposed measures include:
- limiting the PIT deductions and exclusions for individuals earning more than 2,300 USD a month (i.e. 2.4% of the richest individuals),
- reducing the PIT exemption for pensions,
- eliminating 18% of the sectoral and regional tax benefits for corporations,
- limiting tax expenditures for businesses that will be capped at 3% of net taxable income,
- eliminating of preferential tax treatment for fuels in border zones,
- and eliminating the “VAT-free days”.
Read the full article New Colombian tax bill aims at oil exports to fund social spending