Colombia Government Sends $3.9 Billion Tax Reform to Congress Amid Renewed Protests

Colombia’s government formally presented a $3.95 billion tax-reform bill to congress, even as unions and student groups sought to revive the street protests that helped scupper the reform’s original iteration, Reuters reported. The law would raise 15.2 trillion pesos per year, significantly less than the 23.4 trillion pesos sought by the government in an April proposal that was later withdrawn amid sometimes-deadly protests and lawmaker opposition. The government of President Ivan Duque insists the law is vital at a time of rising debt and an expanding fiscal deficit and must be passed to shore up social programs and allay investor fears about Colombia’s medium-term fiscal management. Standard & Poor’s and Fitch have already cut Colombia’s credit rating to junk. The bill would increase businesses’ taxes by 4 percentage points to 35% from 2022, raising some 6.7 trillion pesos. It would raise another 2.7 trillion pesos by fighting evasion and enshrine 1.9 trillion pesos in public spending cuts, among other measures. The finance ministry has emphasized that the bill will not affect most taxpayers, after a proposed increase in sales tax in the April version drew special ire. Read more.