Specialists from Javeriana University and the Autonomous Committee of the Fiscal Rule are urging structural changes, including VAT base expansion and improved DIAN enforcement, while President-elect Abelardo De La Espriella prioritises eliminating the 4x1000 tax, wealth tax, and fuel levies. 

RF Report

Colombia is preparing for a potential tax reform driven by rising fiscal pressures and a growing deficit. While the incoming administration has proposed tax cuts, experts argue that broader structural changes will be needed to increase revenue and improve tax collection without undermining economic stability.

Specialists from Javeriana University’s Fiscal Observatory and the Autonomous Committee of the Fiscal Rule are advocating for a revenue-focused approach. Their key recommendations include eliminating unnecessary tax exemptions across sectors, broadening the VAT base, and expanding income tax collection through progressive rates applied to a larger pool of earners.

They also point to corporate income tax—already among OECD peers’ highest—as a potential lever for adjustment.

Strengthening the DIAN (Colombia’s tax authority) with modernised technology and establishing a unified income registry feature prominently in their proposal. Environmental and health taxation could also be tightened, while selective pension schemes may face restructuring to ease pressure on state finances.

The president-elect has outlined a markedly different strategy: cutting taxes to stimulate economic activity. His stated priorities include phasing out the 4×1000 transfer tax, scrapping the wealth tax, reducing fuel levies, and lowering corporate income tax rates.

Yet economists caution that any tax relief must be offset by fresh revenue sources or disciplined spending cuts—a balancing act the government has yet to articulate clearly.