Colombian Government seeks to continue the benefits, mechanisms and norms within the Financing Law
Colombian Government seeks to continue the benefits, mechanisms and norms within the Financing Law
The Colombian Constitutional Court has declared Law 1943 of 2018 –Financing Law— as unenforceable due to procedural defects in Congress.
The norms within the Financing Law will remain applicable until the 31st of December 2019. The ruling issued by the Court will enable the National Government to submit before Congress a new bill before the end of 2019, which is expected to be entering into force by 2020.
The President of Colombia, Iván Duque, responded to the Court’s decision by instructing the Ministry of Finance and Public Credit to “include in the new bill submission all the benefits, mechanisms and norms originally included in the Financing Law approved by Congress.“
This with the objective of giving continuity to the path that the Government has set, which, as stated by the President, has proven to be effective.
He also highlighted the benefits that the law has allowed for and stressed that the National Government will “continue to effectively create favourable conditions for employment generation, to boost the economy and close social gaps.”
President Duque also sent a message to all business, entrepreneurial and the international community, assuring that the Government “will proceed with a sense of urgency and safekeeping legal certainty, along with Congress, to continue in the path of positioning Colombia as an attractive business destination.”
Through this link you may watch the complete presidential statement.
Below you may read the complete presidential statement.
PRESIDENT IVAN DUQUE´S DECLARATION WITH REGARDS TO THE CONSTITUTIONAL COURT´S DECISION ON THE FINANCING LAW
Bogotá, 16 October 2019.
Fellow Colombians,
The Constitutional Court has declared Law 1943 of 2018 –Financing Law— as unenforceable due to procedural defects in Congress. The Court´s release emphasises that norms within the Financing Law will remain applicable until the 31st of December 2019, and thus, all income tax returns filed in 2020 will be treated according to that norm.
The ruling issued by the Court will enable the National Government to submit before Congress a new bill before the end of 2019, which is expected to be entering into force by 2020.
To ensure continuity, I have instructed the Ministry of Finance and Public Credit to include in the new bill submission all the benefits, mechanisms and norms originally included in the Financing Law approved by Congress.
In this manner, by the end of the current year we will be able to continue the path that we have set, which has proven to be effective.
Amongst the several benefits the law has allowed for, I would like to highlight these:
1. The Colombian economy is growing at a rate above 3%, the highest since 2015 and much higher than the projection for Latin-American countries. During the last few months we have observed an acceleration tendency in the Colombian economy.
2. Tax collection has had its best performance since 2014, growing above 10%.
3. Progress has been made with regards to the implementation of the electronic bill and tax information exchange for commercial networks. The latter has had a positive impact on the formalization of small companies.
4. Company formalization has also benefited from the regime, through a simplified taxation system and lower rates. Thousands of companies have benefited from such regime since its entry into force.
5. Foreign Direct Investment has reached its highest growth since 2012. During the first semester of 2019 there has been a 24% increase on investment inflows, compared to the same period in 2018.
6. A more efficient and competitive economy has been acknowledged by International Markets, due to the notable decreased effective tax rate for companies within the Colombian territory.
7. Incentives were created to foster tourism, creative industries, investment in the countryside, labour formalization, normalization of taxpayer assets, and all in all, establish a mechanism for the Colombian economy to position as a performance benchmark globally.
The National Government will continue to effectively create favourable conditions for employment generation, to boost the economy and close social gaps.
To all business, entrepreneurial and international community, and to all that have foreseen a clear path with the Financing Law, we assure you that we will proceed with a sense of urgency and safekeeping legal certainty, along with Congress, to continue in the path of positioning Colombia as an attractive business destination.
Fellow Colombians, there is no room for uncertainty. We have achieved trust in Colombia and will continue working along this path.
Thank you very much.