No plans for more changes to Colombia’s tax code: finance minister

BOGOTA (Reuters) – Colombia’s government has no further plans to change the tax code, Finance Minister Alberto Carrasquilla said on Monday, despite market expectations that the government will have to find additional money to finance coming budgets.

The country’s Congress approved a tax legislation worth 7.8 trillion pesos ($2.48 billion) late last year to finance the 2019 budget. The amount was 44 percent less than originally sought, obliging the country to cut spending to meet fiscal targets.

Colombia is lacking the equivalent of a half point of GDP in financing for next year as well as 0.7 percent of financing for 2021 and 1.1 percent for 2022, the central bank says.

“No way am I going to propose a tax reform, no way. It is absolutely incorrect to say that with the information that we have today that there will be a reform, not even the remotest possibility. We’re not even thinking of it,” Carrasquilla told local Caracol Radio, referring to changes in the tax code.

Reaching the fiscal deficit goal for 2020 is growing more difficult without changes in taxes, ratings agency Fitch said last month.

Fitch, which gives Colombia a “BBB” credit rating, said the recent legislation’s tax cuts for businesses will reduce government intake by 0.8 percent of GDP in 2020. That amount will be difficult to replace with current duties and anti-evasion efforts.

Colombia has a central government fiscal deficit goal of 2.4 percent of GDP for this year, 2.2 percent in 2020 and 1.8 percent in 2021.

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