Colombia Hikes for Wealthy
September 10, 2014 Taxation in Colombia
BOGOTÁ – The government of Colombia will not be able to pay for its planned expenditures without implmenting a round of proposed new tax hikes to be paid by wealthy taxpayers .
Earlier this week the Finance Minister of Colombia Mauricio Cardenas announced that the government has proposed that taxes targeted at the country’s wealthiest individuals should be hiked in order to help raise new funds for government expenditures.
The Minister said that the currently enacted 0.4 percent tax on financial transactions should be extended until 2018.
The current tax on wealth is also to be increased, rising from 1.5 percent to 2.25 percent for individuals and entities with assets of more than COP 8 billion.
The wealth tax will be applied at a rate of 0.4 percent on wealth of COP 750 million to COP 3 billion, and 1.1 percent for taxpayers with a total wealth of between COP 3 billion and COP 5 billion, and a rate of 2 percent on wealth of between Cop 5 billion and COP 8 billion.
It is currently estimated that 50 000 individuals and 40 000 corporate entities in the country will be required to pay the newly hiked wealth.
The two taxes are expected to results in the collection of an extra COP 12.5 trillion next year.
The funds are already earmarked to fund government expenditures in 2015, as, currently, the slated expenses exceed projected incomes, and the government cannot take on any more debts to pay for the expenses.
Photo By: Olga Berrios