While the country is waiting to know how the tax accounts of 2024 were and what will be the moves that the Government alist for the current validity, the Ministry of Finance already is clear about its action plan and that, that, According to its calculations, the fiscal rule has been respected in recent months.
In a talk with Portfolio, Minister Diego Guevara said that they will seek to extend the validity of the taxes created with the internal shock, that the floor of the tax reform that will take to Congress this year will be $ 12 billion and that although 2025 will be a year challenging prosecutor, they are convinced that they will get it forward.
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What taxes are going for internal shock?
I think we can analyze the situation from two perspectives: the short and the medium term. In the short term, practically immediate decisions are contemplated within the framework of internal shock, and in fiscal matters, preliminary, three measures have been defined. The first is the online gambling tax, since other gambling are already subject to taxation.
At the moment, it works in a decree that includes three taxes, although they could be more, since various alternatives are being evaluated. In addition to the online gaming, an oil and coal tax, and a specific tax on the bell, applied to notarial procedures that exceed $ 1 billion.
How much do you expect to raise
These short -term taxes seek to raise approximately $ 1 billion at a validity of 90 days. However, some interpretations of the Court suggest that, within the framework of internal shock, if public order is required, fiscal measures can be extended throughout fiscal validity. In that case, these provisions would apply throughout 2025.
Diego Guevara Minister of Finance
X dnp_colombia
Why would it be extended?
What I mean is that there are legislation of the Constitutional Court or Edicts of the Court, which state that in tax and tax issues taxes can exceed validity and shock because, for example, in the end a tax like VAT you It raises every two months. Then you must wait for some deadlines to receive that collection.
In addition, it is not like collecting these resources for emergency in the Catatumbo and believing that the problem is solved, only with fiscal measures. That demands a time work that derives resources and an extension of the measure. We must give a debate in that regard, we are approaching and we will have to wait for what the Court says.
How much would be the collection with the extension?
More or less, checking around 270 days, it can be something like approximately $ 3 billion. We have several analyzes that tell us that this would be the margin to wait within that period, if it is postponed.
This decree, I think it will be the last one that will come out. Some decrees have already begun and will come more this week, and the idea is to have all the consolidation of the emergency value and shock and there to try to consolidate our tax decree that is consistent with the expected expenses.
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And the tax reform?
At the same time, by instruction of the President, he is working on a tax reform that not only responds to the needs of 2025, but to establish permanent taxes. This reform would include corporate and income taxes, but with the aim of reducing the tax burden for small and medium enterprises.
It is also proposed to resume elements of the Financing Law, as well as proposals discussed in 2022, including taxes on the churches and digital platforms, among other issues that will be part of the debate in this structural reform.
How much will they seek to raise?
The tax reform will be based on a collection goal of $ 12 billion, that will be the starting point. Various taxes and sectors that have not yet been taxed will be analyzed. In particular, there are emerging segments of the digital economy that have already been consolidated and for which fiscal stimuli have ceased to be necessary.
There are multiple industries within the digital world that could contribute to taxation through different transactions. The key will be to evaluate the operational viability to implement these taxes effectively.
The catatumbo.
César Melgarejo / Portfolio
As for the collection goal, the expected minimum level is $ 12 billion, although the final amount will depend on the concertations with the Congress. However, the ideal objective would be to reach $ 20 billion, an ambitious figure but necessary to guarantee long -term fiscal sustainability.
Is there a environment in Congress?
I think there was a first approach presenting the decrees of internal shock and now we will wait for February when the Congress will start to see how it behaves.
I think it will be part of the task of reactivating conversations with Congress and highlighting, by luck, all these resources to finance the different regional investment projects and to finance all the needs of deep Colombia that also interests all representatives of the regions .
How were the accounts in 2024?
I believe that the tax balance of 2024 reflects an effort of huge dimensions to comply with the fiscal rule. A cut of 28.8 billion pesos has been made and an extremely strict cash management has been carried out. In addition, we have resorted to technical analysis to determine what constitutes or not a transaction of only time, since these are not included within the fiscal rule.
The fiscal rule is forceful and, when affected by certain episodes, it is similar to what happened when the Court denied the litigation on the non -deductibility of royalties. For us, that is a transaction only. While the CARF has some theoretical differences in this regard, we maintain our posture.
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The confis has already voted on these issues, and in this scenario we will fulfill the fiscal rule of 2024. It is important to note that in 2023 we complied with slack, while in 2024 we probably achieve it with a very tight margin. By 2025, it will be necessary to ensure new resources, and additional adjustments may be required to guarantee compliance with the fiscal rule.
Which transactions would be counted as the only time?
There is an important point: in 2023, for example, there was a sudden fall in carbon tax collection. If we look 2022, due to the war in Ukraine, the increase in coal prices promoted fiscal collection. However, subsequently, the abrupt fall of prices caused a decrease in collection, breaking the rhythm that had been reached.
Colombian pesos
EFE
In this context, when sudden falls are presented in the collection, we are facing an event of a single time. That is, the price of coal collapses drastically is an exceptional situation. In the same way, that the Court fails against the deductibility of royalties is a unique fact. These situations are what we call one-off or transactions of only time, and have all the technical support of the Ministry of Finance to support it.
The carf thinks differently …
The confis already approved this interpretation. While the carf does not consider it in its concept, we respect its position. However, we must remember that their pronouncements are not binding.
In addition, other market actors, such as Standard & Poor’s, and various recent indicators reinforce our analysis. In the last month, we have seen a fall in the Credit Default Swap (CDS) of Colombia and an appreciation of the Colombian peso in the last two weeks. These factors are key and deserve to be taken into account in the discussion.
Are the tes be pressed a lot?
No, I believe that we have moved around the year within the margin of the rule, although the debt in tes has increased, the demand remains important. It has clearly had to resort to internal debt resources in terms of the absence of a cashier we did not have, but always respecting the fiscal rule. And it is clearly debt in pesos because the box for our obligations is in pesos.
