(Bogota, August 9, 2016) -- Colombia's Finance Minister, Mr. Mauricio Cardenas, recently revealed to the press the key proposals of the upcoming tax reform, letting the public know that the Government will not be filing their Tax Bill proposal before October 2016.

After the Government appointed Experts Tax Reform Commission released their recommendations on early 2016, and to this date, the Government has not released an official Tax Bill proposal, surrounding the scope of the upcoming tax reform with a veil of speculation.

According to Mr. Cardenas, the key proposals being considered by the Government are: (i) that the current CREE tax is expected to be repealed because of the compliance burden and complexity that resulted from its adoption; (ii) that the corporate income tax's taxable base will be the taxpayer's accounting profits (with limited adjustments) based on NIIFs (IFRS) accounting, as recommended by the Experts Tax Reform Commission, in an effort to eliminate differential treatments from decades of tax reforms creating tax benefits that eroded the current taxable base; (iii) introducing enticing incentives to jump-start the O&G and Mining industries; (iv) not enacting a new extension of the wealth tax (i.e., net-worth tax); and (v) a thorough revision of the tax regime for nonprofits and charitable organizations in an effort to curve tax abuse through this type of entities.

Despite this announcement, key questions, such as (i) whether the Government will move to enact dividend taxation while reducing the corporate income tax statutory rate somewhere between 30% and 35%; and (ii) a 2-3 points VAT rate increase, to raise revenue collection to finance social investment in the new Peace era, after turning the page on the 5 decades internal conflict with leftist guerrillas, remain to be answered.

[KEY TAGS: #Colombia #TaxReform ]