The tax reform is one of the main axes of the policy with which the incoming government arrives under the presidency of Gustavo Petro. In an interview with Yamid Amat, for EL TIEMPO, Luis Carlos Reyes, new director of DianHe explained what his proposal would consist of.
(Read: The taxes that would come with the government of Gustavo Petro).
The reform, in general, has three axes: “dramatic” reduction of current tax exemptions, both for individuals and companies; effective prison for evaders; and a significant increase in the list of lawyers, accountants and specialized tax specialists at the Dian’s service.
Reyes explained that the exemptions may not be greater than 4 million pesos and that amnesties will be prohibited. For him, the tax reform is focused on: reducing income tax exemptions for individuals and companies, lowering the corporate income tax rate for 95 percent of companies, and combating tax evasion head-on.
Regarding the exemptions, he clarified that today the exempt income can be up to 40 percent of your income, even very high income. What they are looking for is that once 40 percent of the income exceeds four million, it stays there.
Regarding people who have a monthly income greater than 10 million de pesos said: “Today the exempt income can be up to 40 percent of your income, even very high income. What we are going to do is that once 40 percent of the income exceeds four million, It stays there. No one is going to have an exempt income as a natural person of more than 4 million pesos.”
According to his calculations this would be a additional collection of 1% of GDP. That is, almost 10 billion pesos. “Individuals are going to have an exempt income of a maximum of four million pesos. For companies we are going to seek to end all sectoral exemptions, that is, those that are aimed at a particular sector of the economy, since these benefits are distributed in an unequal way, not equitably among the companies; then, we are going to seek to end these exemptions so that there is more collection and lower the rate to 95 percent of the companies,” he specified in the interview.
Regarding corporate taxes, Reyes explains that currently very large companies have a very low effective rate because they have many exemptions and small, micro and medium, pay a very high. For this reason, when the exemptions end, the effective rate of the companies rises and thus the nominal rate can also be financed.
“The result of all this is that approximately 95 percent of all businesses in the country are going to pay less in taxes now.“, he pointed out. This elimination of exemptions for companies, he assures, involves around 20 billion pesos.
(Read: Petro tax: more taxes for the wealthy than for companies).
For all these reforms, Reyes is blunt in that he will need more staff in Dian and, in turn, much more severe penalties that include prison for the great evaders. “In the bill that we are going to present, prison sentences for tax evasion will be clearly established for large taxpayers, and that there is no exception that if you pay enough you do not go to jail,” he said.
According to the official, the State loses up to 80 billion pesos due to VAT evasion, by individuals and companies.
BRIEFCASE
With information from EL TIEMPO*
