00:00How much will they pick our pockets with the tax law?
00:02Here are five things you should know about the bill that will soon begin to be debated.
00:08Congress.
00:09First, why did he come forward?
00:11The government promises to defuse a fiscal time bomb that would explode in 2027 because, basically,
00:17Colombia is spending more than it receives.
00:20Think about your own finances.
00:22If you don't have enough money at the end of the month, one option is to borrow from a friend or from
00:27a relative.
00:27If the same thing happens the following month, you may have to resort to your credit card, which charges interest.
00:34higher.
00:35If you don't address the problem by increasing your income, curbing your spending, and making a plan to pay off your debts,
00:41The situation will become increasingly serious.
00:43Something like this is happening in Colombia.
00:45According to the government, the country spends about 11 trillion pesos more each month than it receives.
00:51In this scenario, debt has increased, and so has the cost of borrowing, that is, the interest.
00:58With this project, the government estimates that the country's finances would improve by 51 trillion pesos in 2027.
01:05and more than 122 trillion pesos in 2030.
01:09It was clear that accounts had to be settled, but the government of Abelardo de la Esprella had said that it
01:14This would be done by cutting spending.
01:16The surprising thing about the project is that it also brings taxes.
01:19The law has 106 articles, so we're not going to talk about all of them in this video.
01:24Only some of those that will affect your wallet the most.
01:28Second, what will the cut look like?
01:30Most of the adjustment, 70% according to the government, would come from cutting public spending.
01:36The promise is to reduce the size of the State by 15%.
01:39Among many other measures, it is proposed that by 2027 spending on service provision contracts be reduced to
01:46half
01:47and that by 2028 the personnel expenses of all entities in the national general budget will be less than
01:54the public force, fall by 20%.
01:56Furthermore, the law would give the president extraordinary powers for six months to abolish and merge ministries and entities,
02:05reorganize staffing structures and, essentially, redesign the State.
02:09The belt-tightening would hit contractors hard.
02:13Third, the changes in VAT.
02:15The government proposes to eliminate a large part of the VAT exclusions and exemptions, as well as the reduced rate of 5%.
02:22Beyond the technical aspects, this means that goods and services that are currently at 0% or 5%
02:28% would remain with the general rate of 19%.
02:32Some since the law is passed and most since January 2028.
02:36The list includes many products that you probably consume, such as coffee, most fruits, salt,
02:43fresh cheese, dried beans, and dried lentils.
02:46Fixed internet service for households in socioeconomic levels 1, 2, and 3, as well as movie tickets, would also feel the impact.
02:52and entertainment and prepaid medicine.
02:55Here you can see the list of products and services.
02:57To offset this increase, the government proposes Efectiva, a program that would refund VAT to people with lower incomes.
03:04According to the Ministry of Finance, 19 million Colombians, the poorest and most vulnerable, will receive a full VAT refund.
03:13that they pay up to a limit of about 280,000 pesos per month.
03:18Another 16 million would receive a partial refund.
03:21However, there are significant challenges.
03:24Experts have warned that putting the mechanism into operation will not be easy.
03:28Fourth, income tax.
03:30The government proposes lowering taxes for businesses to boost economic growth.
03:36The general rate would decrease from 35% to 33% in 2027 and to 31% from 2028 onwards.
03:44It would also create the single regime to generate business stability, RUGE, with lower rates for large new investment projects.
03:53that start between 2027 and 2029.
03:56But the project would increase the burden on people.
04:00Look, to calculate income tax, deductions and benefits are subtracted from each person's income.
04:06that the law allows.
04:07Today, if what remains after that subtraction, the so-called recordable base, does not exceed 1,090 units of
04:13Taxable value, VT, about 57.1 million per year in 2026, no tax is paid.
04:20With the government's proposal, that limit would drop to 720 VT, about 37.7 million pesos.
04:28For those between 720 and 1,090 VT, the rate would be 9%.
04:33The Finance Ministry has said that in practice the measure would affect people with salaries of 5 million.
04:39of pesos and up.
04:41The proposal also raises rates for two of the highest income brackets, as you can see in this table.
04:46The project includes many other changes, such as the elimination of some existing benefits.
04:52Fifth, social security.
04:54Today, companies that file income tax returns do not pay contributions to SENA or ICBF, nor any part of the health insurance that they...
05:01It corresponds to the employer for workers who earn less than 10 minimum wages.
05:06With the project, that benefit would only be maintained for those earning up to two minimum wages.
05:11For those earning between two and three, companies would have to pay a portion, 1% to SENA, 1
05:17% to ICBF and 4% to health.
05:19And those who earn more than three would pay the full contributions.
05:23That is, 8.5% to health, 3% to ICBF and 2% to SENA.
05:29Experts are already warning that this could affect formal employment.
05:32There is another change that will likely affect your wallet.
05:35Today, employees contribute 4% of their salary to health insurance.
05:38With the project, this percentage would increase for those who earn more than two minimum wages.
05:43The ranges go from 5.5% to 8%, depending on the salary, as shown in this table.
05:49The self-employed would also pay more.
05:52Today they contribute 12.5%, but with the project they could pay up to 15.5%.
05:59And the bonus, what's coming next.
06:00This project has to go through four debates in Congress, two in the House and two in the Senate.
06:05Nothing is more unpopular than taxes, so the project will surely undergo many changes along the way.
06:12Since it was filed at the end of October, congressmen from all parties have questioned the new taxes.
06:19It is clear that the fiscal situation needs to be fixed.
06:22But who should contribute more? What are the best options?
06:26That's the debate. At El Espectador, we'll continue to report on the project's changes and how they might affect you.
06:33If you want to know something specific or have any questions, leave them in the comments.
06:37And tell us, what do you think of the tax law?
