Colombia | Solving the tax issue is important for everyone

Summary

The latest political discussions within and outside of the Congress have placed the tax reform in uncertainty. It is necessary to reach agreements and quickly approve the best version of the reform in order to avoid negative effects on the economic recovery process along with investment and consumption decisions.

Key points

• Key points:
• It is a reality that the country needs to increase revenue from 2022 onwards to finance growing spending needs. For revenue to increase in 2022, decisions on taxes must be made this year.
• If employers and merchants are unaware of the Government's social expenditures, this may lead to a possible reduction of workers, which could increase the damage to the labor market.
• Failing to implement the reform will certainly affect the country's fiscal sustainability, which will negatively affect the macroeconomic stability and growth.
• If the reform does not respond to the needs of fiscal sustainability and stabilization of public debt, the possibility of losing the investment grade rating grows, generating an increase in the cost of debt for all: governments, families, and companies.

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