The main reason why Colombia is one of the countries with the most tax losses

Colombia is the eighth country in the world with the highest tax losses and More than a third of the direct investment made abroad this year is destined for a ‘tax haven’, According to a report published by Oxfam Colombia.

“In the last decade, one of every three dollars in investment that enters or leaves Colombia passes through a ‘tax haven’, a reality that is generating important economic and social challenges.“, denounced the NGO, which reminds that this is not a phenomenon unrelated to what is happening in Latin America, where 27% of private wealth is in what they call “tax hideouts“.

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Oxfam points out that Of the total investment that Colombia attracts, 28% comes from ‘tax havens’ and the majority, 14%, from Panama, country from which 935 million dollars arrived, “a territory linked to tax evasion scandals such as the ‘Panama Papers’ and that continues to appear on the list of ‘tax havens’ of the European Union“.

“In the midst of the uncertainty due to the fall in tax collection and the budget viability of next year, it is impossible to close our eyes to the economic reality in Colombia and in particular the trends in terms of foreign direct investment.“adds the report.

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According to Oxfam, “Current data show a worrying scenario, since so far in 2024, more than a third of Colombia’s direct investment abroad is destined for a ‘tax haven’, which is equivalent to 36% of total Direct Investment of Colombia Abroad (Idce)“.

Only In the first half of this year, a total of 3.2 billion pesos have been transferred from Colombia to countries with low or no taxation. (about 749 million dollars), which is equivalent to almost 49% of the projected budget for social inclusion investment in 2025.

These ‘tax havens’, which Oxfam asks to start calling ‘tax hideouts’, They are used mainly by “large corporations and people with greater purchasing power to obtain benefits and evade tax payments, depriving the State of collecting fundamental resources for social investment and community development“comments the NGO.

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It is due to this practice that Colombia appears as the eighth country in Latin America with the most fiscal losses, according to 2020 figures, which weakens public finances and increases the inequality gap.

“It is imperative that Colombia review its list of tax havens and adopt stricter criteria to identify and sanction jurisdictions that facilitate these practices.“asks Oxfam, which also calls for improving international information exchange mechanisms so that financial flows to these ‘dens’ can be better traced.

(See: Analysis: the positive points and risks of the Government financing law).

EFE