The Comptroller General of the Republic has raised the alarm due to the sharp drop in tax collection in the first half of the year, which even exceeds, in real terms, the collapse observed in the first half of 2020 (17%), when the impact of the covid-19 pandemic was felt.
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According to the control entity, during the first six months of this year A total of $126.63 billion has been collected in taxes, representing 40% of the $315.86 billion in tax revenues budgeted for the year..
The revenue execution report of the General Budget of the Nation (PGN) at the end of the first half of 2024 shows that modifications have been made to the budget approved by the Congress of the Republic for $0.78 billion, bringing the current estimate of revenue for 2024 to $503.38 billion.
Accordingly, the cuts announced by the Ministry of Finance have not yet been incorporated into the PGN. However, There was a recomposition of the nation’s capital resources, decreasing other capital resources by $17.46 billion and increasing internal credit resources by the same amount, which shows a higher internal debt than initially estimated..
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The General Budget includes a tax collection target of $315.86 billion, which contrasts with the target established in the Medium-Term Fiscal Framework 2024, of $258.60 billion. In total, The Ministry of Finance has reduced the tax collection target for 2024 by $57.26 billion, but this change has not been reflected in the budget report.
The reasons for this decrease include the drop in the collection of income tax and external taxes, as well as the efforts of the DIAN to reduce tax evasion, which has not yet yielded the expected results.
Lower net cash collection
According to SIIF information, $215.81 billion has been collected in the first half of 2024, with refunds of $2.43 billion (mostly taxes), generating a net effective collection of $213.38 billion, nominally 0.3% lower than the same period in 2023. This net cash collection corresponds to 42.4% of the current capacity as of June.
The Nation’s net income reached $196.66 billion (41.3% of the annual target) and the own income of Public Establishments reached $16.72 billion (62.3% of the annual target).
Through June, $129.01 billion in tax revenue has been collected, with refunds of $2.38 billion, which generated a net effective collection of $126.63 billion. In the first half of the year, net effective tax collections represented 59.3% of total budget revenues and 64.4% of the nation’s resources collected.
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Regarding the current tax revenue assessment, The collection as of June 2024 shows an execution level of 40.1%. Compared to the collection in the first half of 2023, tax revenues show a decrease of $15.82 billion.
The real decline in tax revenue in the first half of 2024 (17%) exceeds the decline observed in the first half of 2020 (13%), when the impact of the pandemic was felt.
Briefcase
Highlights
Within the effective tax collection for direct taxes, $63.89 billion (50.5% of the total) and for indirect taxes, $62.73 billion (49.5% of the total) have been received.
• The large 46.3% drop in the income tax rate component, affected by the low dynamism of economic activity in 2023.
• Domestic VAT revenues amounted to $33.15 billion, with nominal growth of 8.1%, despite the 8.9% drop in the withholding tax component.
• The $3.57 billion drop in customs and external VAT collections, in response to the drop in imports and the appreciation of the Colombian peso.
• The nominal increase of only 4.7% in the tax on financial transactions, contributing to a collection of $7.07 billion.
Other figures
Net effective collection of the Nation’s capital resources reached $60.38 billion in the accumulated period to June, with a nominal increase of 22.1%, mainly due to higher income from surpluses ($3.49 billion, of which $3.44 billion come from the National Hydrocarbons Agency), dividends and profits ($18.34 billion, where $9.22 billion come from the Bank of the Republic and $9.12 billion from Ecopetrol), and credit resources ($37.24 billion, with $9.03 billion of external credit and $28.21 billion of internal credit.
BRIEFCASE
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