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Tax reform, what is it?

Today at Cuadro Legal, a law firm in Medellín, we explain in a simple way what a tax reform is.

In order to explain this topic, it is relevant to begin by specifying that in Colombia we have the Tax Statute, Decree 624 of 1989, which regulates how the State collects taxes from individuals and legal entities.

Thus, when the Government needs to obtain greater revenues, it must promote a bill to reform the aforementioned statute. This bill must be submitted and filed before the Congress of the Republic, through the Ministry of Finance.

Now the question arises as to why this reform has caused so much commotion. The answer is perhaps because, among many other things, this reform aims to:

  1. Taxing more of the food basket

  1. Taxing pensions

  1. Contemplates taxes on the use of plastic

  1. Broaden the taxpayer base, i.e., reduce the minimum amount above which citizens must file taxes with the authorities.

Consequently, with measures such as the above, the National Government is promoting the current and controversial reform in order to obtain income to carry out social programs or works.

Written by: Alejandra Cardona Mercado

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