tax

The Government’s decision to maintain in the tax reform a new tax on coal exportsas part of the additional levies that the mining industry would pay, goes against several free trade agreements (FTAs)) in force that Colombia has with various countries.

This is stated in a concept from the law firm Araújo Ibarra, known for EL TIEMPO, in which the rate provided for in the bill, 10 percent, and the impacts on commercial matters for the country were analyzed.

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According to the document, in the FTAs ​​that Colombia has signed with other countries, specifically with Chile, the European Union, the United States, Korea, Israel, Mexico and Canada, to which it exports coal, the country has made an express commitment that prohibits create export taxes, tariffs and other charges, unless these also apply when the merchandise is destined for domestic consumption.

According to Ricardo López, partner of the firm, this prohibition in the FTAs ​​applies to any type of product that leaves the country for these countries, including oil, manufactures or food, among others.

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For example, in the case of the Netherlands, Poland, Spain, members of the European Community, the treaty in its article 25 determines that “unless otherwise provided in this Agreement, neither party shall adopt or maintain any tariff or tax, other than a internal charge applied in accordance with article 21, to or in connection with the export of goods to the territory of another party”.

“It would lead to the application of retaliatory measures by other States against some of the products that Colombia exports to said countries,” says the concept. Senior executives of a mining company consulted pointed out that it is a minor issue, since there is a European market that, due to the closure of gas sales by Russia, depends on fuel to get through the winter.

Likewise, the document maintains that imposing taxes on coal exports, for ‘extraordinary profits’ based on increases in international prices, without taxing other minerals in similar conditions, violates the constitutional principles of equality, equity and progressivity. “There is a significant risk that these provisions will be declared unconstitutional,” she notes.

Mining sector also raises surcharge

EL TIEMPO learned that on Saturday the Colombian Mining Association sent a proposal to the Government so that, instead of the export tax and eliminate the deductibility of royalties, there is a rent surcharge of up to 5 percent for coal miners .

It would have a fixed rate of 3 percent and two additional points that are activated according to the international price. The first extra point would be settled when the ton is between 164 and 200 dollars, while above 200 dollars the other additional point would be settled.

It is estimated that only with a 3 percent surcharge, the collection from coal miners would reach 2.4 billion pesos a year.

Although the paper on the tax reform was expected to be filed this Monday for the first debate, after 7 p.m. the project speakers entered a meeting at the Casa de Nariño with President Gustavo Petro to make the latest revisions to the text of the paper. , being the prison for evaders one of the points to be discussed.

More royalties thanks to high prices

The Government filed this Monday in Congress the budget bill for the General System of Royalties for the biennium 2023-2024, for 31.3 billion pesos, 2.1 percent of GDP.

According to the Ministries of Finance and Mines and Energy, since 2012 it is the budget that has allocated the most resources to the territories.

The document indicates that there is an international consensus that the supply of oil should remain at levels proportional to the behavior of demand, for which the probability of a price collapse in 2023 and 2024, like the one registered in 2014 and 2015, is low, after the boom of 2012-2013.