Last week Gustavo Petro’s tax reform was approved in the plenary sessions of the Chamber and Senate, and although it is expected that the reconciliation of the texts approved in each legislative body will be firm between today and tomorrow, the articles still generate several doubts among the experts.
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One of the points that has been most questioned is the collection, since of around $20 billion a year that the project would leave, the government estimates that at least $9 billion would come from taxes on the mining and energy sector, especially from the non-deductibility of royalties. and the surtax for oil and coal of up to 15% and 10%, respectively.
As it is not a fixed and permanent income, there are several concerns raised by this source of collection. As is the case of Luis Fernando Mejía, executive director of Fedesarrollo, who stressed that the evolution of the collection will depend, among other things, on the behavior of the price of commodities.
“There are elements going forward to think about scenarios of lower prices, such as in the event that a possible economic recession materializes worldwide, and we could see a drop in prices globally,” explained Mejía.
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The economist also emphasized that part of the income from the reform is not permanent, and that is why it is essential that the reform not be used in its entirety to increase current spending, but also to pay the debt or reduce the deficit. .
Andrés Pardo Amézquita, director of macroeconomic strategy for Latin America at XP Investments, said that “there are a lot of variables that are uncertain and can affect the collection on one side or the other.” At the international level, for example, he pointed to the situation of the war in Russia and Ukraine.
“If the war ends, although that depends on many other geopolitical factors, prices could go down; the global slowdown may also affect, or it is even possible that the collection will be greater than $20 billion”, he assured. Pardo mentioned that another issue to review is that the fiscal rule may end that part of the resources cannot be spent, and we must look forward as well.
oil prices
For José Ignacio López, executive director of Economic Research at Corficolombiana, “it is undesirable that a permanent expense be financed with a structure subject to shocks and that can generate a fiscal deficit in the future.”
According to the economist, in the reform there are several sources of totally transitory nature, and there are cyclical components“that by definition it cannot be guaranteed that tomorrow they will be there,” he said.
The reform approved a 5% rent surcharge for oil companies “when the average price of the respective taxable year (…) is between the 30th and 45th percentile of the monthly average prices of the last 120 months.” The surcharge would be 10% when it is between the 45th and 60th percentile, and 15% when it exceeds the 60th percentile.
According to López, these thresholds would be US$68 in the case of the 30th percentile and almost US$80 in the 45th percentile. “With the prices we are seeing today, it is likely that we will move between a rate of 10% and 15%, but In a more structural way, we would surely be moving closer to 5% or 0%”, explained the executive, who assured that the collection calculations should be made on that basis.
The analyst noted that forecasts point to prices remaining relatively high, but that there are always risks in the picture.
On the other hand, calculations by the economic studies center Anif show that, if oil prices are observed in the last 10 years, the surcharges would have been applied in several periods.
“If you look at history, almost always a surcharge would have been paid,” said Mauricio Santamaría, president of Anif. “Oil prices are difficult to predict, but as things stand now it looks like they are going to stay high. The whole world is going to have an economic slowdown, and that causes the demand for fuel to fall, which can impact the price. But I think the government is going to have a major source of revenue for a while,” he said, too.
The problem, according to Santamaría, is that this same tax is going to prevent many oil companies from coming to invest in Colombia, and the country would be left without that source of revenue. “I see the matter more complex on that side than on prices,” he assured.
Laura Lucia Becerra Elejalde
Twitter: @LauraB_Elejalde
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