Just a few weeks to the final vote on the tax reform project in the plenaries of Senate and House of Representatives, and in the midst of a tense environment due to the impacts of the project on growth, investment and employment, among others, the Government announced in the Tax Reform forum, in the final stretch, changes in the new taxes proposed for oil and coal and agreements for the rates that the free zones will have.
(See: Tax exemptions in construction will continue, informed the Government).
At the meeting, organized by EL TIEMPO, Portfolio and Probogotá Region, The Minister of Finance, José Antonio Ocampo, highlighted that meetings have already been held with Ecopetrol, representatives of the mining industry and that this Thursday the first meeting with the speakers took place in view of the final debate that is coming.
The official stressed that after more than 350 hours dedicated to meetings to listen to the positions of the different sectors, it is a widely agreed reform, “the most concerted in history” and the most liberal, emphasizing that It is a progressive project because it is the reform that follows the principles that the Liberal Party has defended.
He said that the conversation has been very positive with the liberal speakers and those from the Partido de la U, and that he trusts that for the plenary sessions the project will count with the necessary votes to become law.
(See: Tax evasion: one of the challenges of tax reform).
Ocampo pointed out that although there will be adjustments in taxes to the energy mining sector and in the free zone regime, he will not give his arm to twist in the plan of tax higher pensions.
Oil: new proposal
Minister José Antonio Ocampo revealed that mining taxes were reduced to oil and coal. The rest of the products (coke, ferronickel, construction materials, etc.) were left out. In addition, he announced a new formula to calculate the rent surcharge for oil and coal, which will be variable and depending on the bonanza that live in the prices abroad, which would even allow that there is no surcharge when prices fall.
“If the price in the taxable year exceeds 30% of the average price of the last 20 years, it has (a surcharge) of five percent; if it exceeds 60 percent, 10 percent (applies). And when international prices drop, that surcharge disappears”.
(See: This is the new proposal for taxation of the energy mining sector).
Regarding the non-deductibility of royalties, Ocampo acknowledged that it continues to be “a fairly complex issue” that has analyzed with Ecopetrol, Drummond, among others.
“Let’s see which formula would be the most acceptable. Our vision is that royalties are the payment for an asset of the Nation, and therefore cannot be deducted as any other cost.”.
The complexity lies in the fact thatroyalties are sometimes paid in kind and sometimes in money and that makes them not comparable”, commented Minister Ocampo.
He also reiterated that exploration and exploitation contracts will be respected, but it left an open door for new agreements to be considered to explore and exploit oil according to the rate of export diversification: “We have to see how we stop being dependent on the 40 percent of oil that we currently export. We are doing a joint exercise with the Ministry of Commerce, with Ecopetrol, and that we will discuss with the Ministry of Mines, about how fast this export diversification can be done. The export of oil has to continue, the question is whether with the existing contracts how much is guaranteed (of resources and foreign exchange), and if it is possible to diversify (with industrial exports, services, etc.) that compensate the reduction in oil”.
In this sense, if the future calculation exercise indicates that the current oil exploitation and exploration contracts do not guarantee the resources required by the State, opening the option to study new agreements would be considered.
oil exploration in Colombia
Briefcase
Minimum wage: adjusted to the formula
Ocampo explained that the other week they will start the negotiations of the Concertation Committee, with unions and businessmen, in which the proposals of the three parties will be heard (along with the one being prepared by the Government).
(See: Tax could worsen possible recession in the country, according to experts).
He did not dare to advance a possible percentage of increase to start the conversations, although it did reveal that the process will be strictly adjusted to the calculation norms ordered by law.
He noted that “the previous government deviated from the historical rules in this year’s increase (2022) and did not comply with the basic principle” of calculate the increase in the cross between inflation plus productivity growth, but “went far above”, that is, he was generous, “and then inflation ‘ate’ the increase in the minimum wage, although that was not in the discussions”.
In this sense, he pointed out that the government of Gustavo Petro “expects to be around the rule, taking into account the discussions to see if there is the possibility of an early tripartite agreement for an increase in the minimum”, he pointed out.
This indicates that the calculation of the increase in the minimum will be by strict combination of the inflation figure and the increase in productivity, possibly with some points above, but without straying too far from said rule enshrined in the law
minimum salary
Carlos Ortega / TIME
Pensions: taxes are maintained on the highest allowances
At this point, Minister Ocampo was forceful: they are going to tax high pensions as it was in the articles approved in the first sessions of Congress, although pension contributions will be exempt from taxes, “as it happens all over the world. The regime that is being proposed is not abusive”.
revealed that, According to his inquiries in 12 Latin American countries, “Colombia is the only country in the region and in the world where pension contributions and pensions are exempt (from taxes). I even investigated the countries that the Attorney General says are exempt, Argentina and Brazil, and found that it is false.”, he indicated.
He pointed out that this proposal to tax pensions is the “least abusive” in the region and it will only impact one percent of pensioners.
“As the reform was approved in the first round, Colombia is left with the greatest benefit in Latin America. Pensions greater than 2,400 dollars will be taxed, followed by Mexico with 2,200 dollars (in exempt pensions), then Costa Rica with (pensions) of 1,200 dollars and the other 1,000 dollars or less”, and added that just “0.3 percent of Colombians” have pensions of $40 million. If 0.3 percent of pensioners (with those allowances) are not going to pay taxes, then who?”, he pointed out.
WEATHER – ECONOMY AND BUSINESS
