Colombia's government, lawmakers cut tax reform take estimate

The reform initially sought to raise an additional 25 trillion pesos a year, but has undergone changes after it sparked market uncertainty. "Social justice and ability to pay are two objectives that seem central to me in the current economic and social climate," Petro said in a statement accompanied by several members of congress who back his government.

Colombia's government and lawmakers have cut their estimates for additional tax take to 20 trillion pesos ($4.03 billion) under a proposed fiscal reform wending its way through congress, President Gustavo Petro said on Tuesday. The reduction from the 21.5 trillion pesos approved in initial debates in Congress is down to the withdrawal of a proposed tax on monthly pensions of more than 10 million pesos ($2,012.50).

An income tax surcharge aimed at oil and coal companies and tied to the commodities' international prices will be introduced more gradually, Petro added, with maximum tariffs of 15% for crude and 10% for coal. The reform initially sought to raise an additional 25 trillion pesos a year, but has undergone changes after it sparked market uncertainty.

"Social justice and ability to pay are two objectives that seem central to me in the current economic and social climate," Petro said in a statement accompanied by several members of congress who back his government. "The value of the tax reform for the coming year is around 20 trillion pesos, which could rise to about 23 trillion by the year 2026," Petro added.

Petro's plans, which include raising taxes on the oil and mining industries, as well as prohibiting new oil exploration, has hit investor confidence in recent weeks, causing Colombia's peso to depreciate and internal public debt to devaluate. The fiscal reform must pass two further debates in the Senate and the lower house before becoming law and taking effect from next year.

($1 = 4,968.94 Colombian pesos)

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