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Colombia’s Petro floats possible changes to tax reform

December 30, 2023
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Colombia’s Petro floats possible changes to tax reform
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Colombia's Petro floats possible changes to tax reform
© Reuters. FILE PHOTO: Colombia’s President Gustavo Petro looks on during a meeting with Venezuela’s President Nicolas Maduro at the Miraflores Palace in Caracas, Venezuela November 18, 2023. REUTERS/Leonardo Fernandez Viloria/File Photo

BOGOTA (Reuters) – Colombia’s President Gustavo Petro on Friday proposed making changes to a tax reform that entered into effect this year that would lower taxes for businesses and hike them for rich individuals.

The changes would not look to increase overall tax take, Petro added.

The fiscal reform, approved by Congress, looked to increase tax take by some 20 trillion pesos ($5.23 billion currently) in 2023, with more money to fill government coffers in subsequent years.

However, the goal was hit by a decision by Colombia’s Constitutional Court which eliminated a law preventing businesses in extractive industries from deducting royalties from their taxable income.

“I invite the business community to discuss the possibility of reforming the tax reform, I think it is time to see the impact of what was approved in Congress in this government and see it in terms of production,” Petro told journalists.

The reform needs reexamining to boost productivity, Petro said, adding that a change to the reform could see corporate tax rates fall while taxes on the highest paid individuals could increase.

In November, Petro said that the Constitutional Court’s ruling would reduce Colombia’s tax income by about 6.5 trillion pesos ($1.7 billion) in 2024.

($1=3,822.05 Colombian pesos)

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