The tax reform of the government of Gustavo Petrowhich was approved and reconciled and is awaiting the vote on the final document in Congress (which would take place this Tuesday, November 15), expects to raise 20 billion pesos during 2023.
(See: Tax: dividends, income and other keys to the final text).
Since August 8 when he filed, one day after the presidential inauguration, the project had several modifications. Among those that stand out the most are the drop in the tax on the highest pensions, the elimination of gasoline subsidies in the border areas and the non-approval of the payment of 20% of income to churches.
Total, 5 trillion pesos fell compared to the initial goal of 25 trillion pesos.
“It is the most liberal and consensual reform in history. More than a figure, we are talking about hundreds of thousands of homes throughout our geography that are going to have a better life.”, said the Minister of Finance, José Antonio Ocampo.
Thus, below, we present the taxes that Colombians will have to pay in 2023.
(See: Tax and Budget, Petro’s first achievements in his presidency).
People making $10 million and up will pay more
The tax reform brings a new tax package for natural people. Some of them will have to pay more in terms of income, wealth and healthy and environmental taxes.
The first thing is that those who earn more than 10 million pesos will pay more. This is due to the fact that the total amount that a person can deduct was limited when making their income statement.
In the case of dividends, these will have rates that will go from 0% to 15% in the case of natural persons and 20% in the case of foreign entities and non-resident natural persons.
Occasional gains (inheritances, property sales…) were taxed at 15%.
(See: Tax: taxes that definitely fell from the reform).
In short, according to calculations by the Fiscal Observatory of the Javeriana University, “a household with an income of 13.1 million would have to add only 17,618 pesos per month to their current income tax payment, which represents 0.13 percentage points in their effective tax rate. To another that has 15.6 million pesos per month, 61,119 pesos (0.39 points) would be added, and to one of 25 million pesos per month, 343,000 pesos per month (2.25 points).“.
Some natural persons will have to pay more in terms of income, assets and healthy and environmental taxes.
Equities from $3,000 million
As for the wealth tax, this will be progressive with marginal rates: 0.5% for those of more than 3,000 million pesos; 1% for those of more than 5,000 million pesos and 1.5% for those of more than 10,000 million pesos.
(See: Deficit and social spending?: what would the tax collection be used for).
In order to discourage emissions, the tax modifies the carbon tax, a tax that falls on the equivalent carbon content (CO2eq) of all fossil fuels in the country (coal, fuel oil, ACPM, gasoline and natural gas, among others).
As approved, this will have a specific rate considering the emission factor for each fuel and will correspond to 20,500 pesos per ton of carbon equivalent.
CO2 emissions.
The companies in this sector are the ones that will pay the most with this reform. Oil tankers and miners will have to pay a rent surcharge that varies with the international price of the last 10 years. In the case of oil it would be progressive from 5%, 10% and 15%. In addition to this, they will not be able to deduct royalties.
Hydroelectric plants and banks
Likewise, the hydroelectric plants were left with a temporary surcharge from 2023 to 2026 of 3 points, that is, 38%, while the financial entities will assume another that will reach 5 points, that is, 40%.
(See: Dialogue with Bruce Mac Master is ‘interrupted’ according to Minister Ocampo).
ultra-processed foods
This proposal puts a tax of 10% in 2023, 15% in 2024 and 20% in 2025 on food industrially ultra-processed or with a high content of added sugar, sodium or saturated fat.
They will be taxed from the mecato to the precooked arepas, the cereal bars, the meatballs, the table chocolate, the Chocorramo, the sausages, the chocolates, the chips, the bananas, the donuts or the achiras. Even baby compotes.
Regarding sugary ultra-processed drinks, the tax will depend on the level of added sugar, which means that they will be taxed: soft drinks, malt-based drinks, tea-type, fruit-based in any concentration, soft drinks, juices and fruit nectars, energy drinks, sports drinks, soft drinks, flavored waters, and powdered mixes.
Some of the products that were saved from the tax were infant formulas or electrolyte solutions, bread, honey, milk, sandwiches, wafers, arequipe, the sausage, the mortadella and the butifarra.
This tax will come into effect from November 2023.
The Chocorramo will have a tax
Several products with tax would be double taxed on behalf of the one that will apply for single-use plastics, such as containers, packaging and packaging that have an equivalent to 1.9 pesos per gram of plastic used.
According to Daniel Mitchell, president of Acoplásticos, the union that brings together and represents companies in the plastic production chains, the rate is approximately equivalent to a 20% and 25% tax on plastic products, which, in turn, , will represent a increase in the price of food drink or cleaning product that comes packaged or packaged, which can be between 1% and 6%.
Basic products that will be impacted by this tax are: ground oats, brown rice, corn starch, barley, wheat and corn cuchuco, shrimp, toast, whole wheat bread, flavored milk, milk modifying powders, cakes, cupcakes, kumis , condiments, liquid hand soap, among others.
This tax will also be charged to sacks and other agricultural packaging used to transport products such as potato, onion, tomatoes, oranges, carrots, between many more.
(See: Shyness of the Government?: This is how they were imposed on natural persons).
VAT on bullfights and the purchase of company animals
The tickets for the entrance to shows, such as bullfights, they must pay VAT, as well as the commercialization of pets, such as cats, dogs, rabbits or hamsters.
Likewise, it was also determined that there will be 0 tariff for agricultural products and inputs.
Dogs are pets
Prison for evaders in third recidivism
The reform toughens the punishments for tax evaders. What was approved is that in the third recidivism people go to jail. For example, imprisonment will be incurred from 48 to 108 months, that is, from 4 to 9 years, whoever omits assets or declares a lower value or declares non-existent liabilities, with the purpose of defrauding or evading an amount equal to or greater than 1,000 minimum wages.
TIME
