The tax reform of the government of Gustavo Petro was filed on August 8 and, with it, there are several sectors that have submitted their criticisms of the proposal.
One of them was the president of the National Association of Industrialists (Andi), Bruce MacMasterwho pointed out that if it is approved as proposed, it would not only drive away investment but would also make Colombia the least competitive country in the OECD.
(Read: Race against the clock: the first adjustments to the tax reform).
“Colombian citizens are not going to want to invest here and foreigners are not going to want to come here either. Due to our decision, we are going to declare ourselves the least competitive country in the OECD”, expressed Mac Master in a public hearing held in Congress.
The Association’s calculations indicate that the effective tax rate currently paid by the industry is 56.7%, that of mining and hydrocarbons 53% and that of transportation 49.2%. However, the changes that would bring the reform suggest that these rates would go to 62, 87.1 and 63.1 percentrespectively.
“That means that for every 100 pesos that a company eventually earns, it would have to give the State 87”, Mac Master pointed out.
Likewise, from Andi they calculate that with the dividend proposal, the combined company-partner income rate, which currently it is 41.5%, it would go to 60.4%. “This would be the highest in the OECD. That would scare away investments”, he warned.
For now, the highest rate has Canada, which has 53.5% and Ireland with 51%. Regarding the region, there is Mexico with 42%, Chile 40% and Costa Rica with 15%.
(See: Tax reform: pros and cons that Anif sees in the project).
This week is decisive in tax matters, since it will be the socialization stage of the project. This implies the search for agreements on some points that have been widely debated from other sectors.
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