Colombia to propose $4.39 billion tax reform to Congress

The government of Colombia is preparing to submit a $4.39 billion tax reform proposal to Congress in the coming days, Finance Minister German Avila announced on Friday. The legislative push arrives as the current session nears its end in June, with a new Congress set to take office in late July. The proposed reform, valued at approximately 16 trillion pesos, mirrors the scale of a financing bill that failed to gain legislative approval in December. The administration faces a challenging path forward in a divided legislature where previous fiscal proposals have struggled to gain traction. The national spending budget for the fourth-largest economy in Latin America is currently projected at 546.9 trillion pesos for the year. Avila emphasized the urgency of the new measures to stabilize the nation's fiscal health. > "The financing bill we presented to adjust the 2026 budget amounted to 16 trillion pesos, and we believe this is the scale on which the tax reform proposal should be presented," Avila stated during a radio interview. > "We have fiscal problems that must be addressed adequately, and to do so, among other things, we require a series of tax reforms that ensure higher tax revenues," the Finance Minister added. The independent Autonomous Committee on Fiscal Rule (CARF) recently reported that the country faces a resource shortfall of 32.1 trillion pesos to meet its current fiscal targets. While the Finance Ministry has adjusted its deficit target for the year down to 5.1% of GDP from 6.2%, external organizations remain skeptical. Analysts and MOODY'S CORP project that the fiscal deficit will likely surpass 6% of GDP.