New Colombian government proposes $5.76 billion tax reform to Congress

Colombia's new leftist government on Monday formally proposed a tax reform bill to lawmakers which would raise some 25 trillion pesos ($5.76 billion) in 2023 in an effort to increase revenue to fund anti-poverty programs.

Colombia's new leftist government on Monday formally proposed a tax reform bill to lawmakers which would raise some 25 trillion pesos ($5.76 billion) in 2023 in an effort to increase revenue to fund anti-poverty programs. Finance Minister Jose Antonio Ocampo said the bill would eventually add some $11.53 billion annually to government coffers, with revenue gradually climbing as parts of the legislation come into force.

The funds, raised by levying more charges on high-earning individuals and commodities, will be directed toward an ambitious agenda of social programs -- including anti-hunger efforts, free public universities and aid for elderly people without pensions. Further details are expected in a news conference with Ocampo on Monday morning.

The reform would levy higher taxes on people who earn more than 10 million pesos, some $2,300, per month, instate a permanent wealth tax and charge a duty on earnings from the sale of shares in companies listed on the stock exchange. The reform seeks increased taxes on coal exports, oil exports above a set quantity and on gold production.

Oil and coal are the country's top exports and source of royalties. Petro has promised to bar all new oil development and also move the country away from coal production in favor of renewable energy and tourism. Petro's promises worry some in the market, but the appointment of Ocampo - one of Colombia's most celebrated economists and a long-time official - may assuage some fears.

Ocampo told Reuters in an interview last week that he will not "do crazy things or allow crazy things", adding it will be "impossible" for Petro to meet his pledges without the tax reform. The reform would also tax sugary drinks, highly-processed foods and single-use plastics.

The bill should be presented with a urgency request by the ministry to facilitate its quick passage, Senate President Roy Barreras, a member of Petro's coalition, said. ($1 = 4,337.28 Colombian pesos)

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