Colombia Should Lower 35% Corporate Tax Rate, Petro Says

(Bloomberg) — Colombia President Gustavo Petro has proposed lowering the country’s corporate tax rate and increasing income taxes for its highest earners.

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The move, which he has not yet detailed, would allow companies to grow and make the tax system more just, he said in a post on X on Saturday. Petro also spoke in broad terms about the tax reform proposal in remarks broadcast Friday after he announced that the government will increase the minimum wage by 12% next year.

The Andean nation’s corporate levy is 35%, one of the world’s highest, and in 2022 Congress approved a package of taxes including a permanent wealth tax, limited deductions for high-income individuals and an increased dividend tax.

Read more: Colombia Lifts Minimum Wage 12% as Central Bank Ponders Outlook

The nation’s tax system has been “radically transformed” by judicial decisions and needs reform to elevate overall productivity, Petro said Friday. In the post on X, formerly Twitter, the president also proposed removing value-added tax for tourism-related activities and creating exemptions for clean energy.

Petro called for informal talks between workers, business leaders and the national government to discuss the reforms “to generate, after growing the minimum wage by 12%, the conditions to increase production and profitability in Colombia,” he said during the broadcast remarks. Any changes to the tax code must be approved by Congress.

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