What options does the Government have to deal with the imbalance in the 2025 PGN?

The National Government has until September 15 to receive the approval of Congress on the General Budget of the Nation (PGN) proposed for 2025. However, the project is underfunded, so the Petro administration faces a major challenge to move it forward.

(Read more: Will the new tax affect occasional profits?: Minhacienda revealed details)

In order to raise the missing resources, which in total is 12 billion pesosThe Executive is planning to present for discussion in the Legislature a new tax reform, also known as the Financing Law, which aims to ‘balance’ next year’s PGN.

However, The outlook for both initiatives is complexas both experts and legislators have raised objections.

Most of the questions are focused on the amount and on how little is known so far about the proposed law, especially considering that time is pressing. Added to this is the fact that the criticisms are not only focused on the lack of resources to cover the obligations of 2025but also in the aggressive cuts in investment and the increase in public spending.

In fact, there are those who warn that the ‘gap’ in the PGN is actually very far from that figure, so efforts to fill it could fall short if the strategy is not accompanied by greater austerity in spending.

Given this situation, What could be the solutions to address the budget imbalance?

(Read more: Congress is asked to return the 2025 PGN project to the Government for modification)

(See: CARF alert on the 2025 PGN: ‘Government accounts repeat past mistakes’)

The alternatives

On the Congress side, some options are being considered to allow the budget to be adjusted in order to make its approval viable. The private sector, for its part, proposes a cut in government spending to balance the books.

On the other hand, it has been put on the table Prioritize the modernization of the Diannot only to boost tax collection, but also to encourage private investment. According to María Claudia Lacouture, president of AmCham Colombia, these approaches would generate more income without compromising confidence in the national economy.

Among the possible solutions, it has also been proposed that, if the budget continues to be underfunded, tax reform should not be introduced, considering that given the current fiscal situation it may not be opportune.

(Read more: 2025 Budget: What would happen if the Government and Congress do not correct the lack of funding?)

PORTFOLIO
*With information from EL TIEMPO