U.S. Government Must Take Urgent Action on Colombia's Tax Reform Bill – uschamber.com

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The U.S. Chamber signed onto a multi-association letter calling on the U.S. government to engage on a Colombia tax reform bill that would undermine Colombia’s competitiveness for trade and investment.

Cesar Vence Cesar Vence
Executive Director, U.S.-Colombia Business Council, Senior Director, Americas, U.S. Chamber of Commerce
Megan Bridges Megan Bridges
Manager, Americas, U.S. Chamber of Commerce

October 26, 2022

On Friday, the U.S. Chamber of Commerce joined other business associations in directing a letter to Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo, and U.S. Trade Representative Katherine Tai calling for the U.S. government to engage  the Government of  Colombia on elements of its Tax Reform for Social Equality and Justice legislation which the private sector believes contravene Colombian international commitments.
Why it matters: The bill includes provisions that undermine Colombia’s competitiveness to attract trade and investment and potentially violate its obligations under the U.S.-Colombia Trade Promotion Agreement (CTPA) and other international frameworks. The proposed measures also threaten to do outsized harm to some of the most vulnerable entities in the bilateral economic relationship, including Colombian and U.S. small and mid-sized enterprises (SMEs) and low-income consumers.
While we commend Colombia’s goal of improving its tax system and we embrace the new Colombian government’s critical priority of meaningfully addressing inequality, the Chamber has previously outlined how some provisions of the current version of the legislation will be counterproductive and harmful to Colombia’s economic growth.
We urged the U.S. government to advocate for the following changes in Colombia’s tax reform bill:
Time to act: President Gustavo Petro’s Pacto Historico party has built a coalition in Congress that has helped it hold a majority in the House and Senate. The bill is expected to be approved in Congress and has already been approved in preliminary debates with little opposition and only minor modifications. Once the bill is approved, it will be sent to the Minister of Finance, who has the authority to make final changes to the text.
Important reversal: Over the weekend, the Colombian government responded to industry concern regarding the above-mentioned proposed changes to the de minimis, announcing that it will maintain VAT exemption for shipments under $200. We commend the President and his government for reviewing the impact of this provision and acting in the best interest of Colombian consumers and small businesses.
Bottom line: Colombia is the United States’ third-largest trade partner in Latin America, and over 500 U.S.-owned firms operate in Colombia contributing over 107,000 direct jobs and 350,000 indirect jobs to the country. The U.S. Chamber of Commerce seeks to leverage American business’s significant economic presence in Colombia to generate enhanced investment, growth and job creation in support of the Petro government’s crucial efforts to ensure prosperity is shared by all of its citizens. Imperative to this aim, Colombia must uphold its international obligations and ensure a transparent and predictable investment climate. That’s why we’re not only making the case to the new Colombian government, but also respectfully asking the U.S. government to engage its counterparts to ensure Colombia’s status as one of our most important trade partners and one of the region’s most attractive destinations for foreign investment.
Executive Director, U.S.-Colombia Business Council, Senior Director, Americas, U.S. Chamber of Commerce
Cesar A. Vence is a Senior Director for the Americas at the U.S. Chamber of Commerce and serves as Executive Director of the U.S.-Colombia Business Council (USCBC).
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Manager, Americas, U.S. Chamber of Commerce
Megan Bridges is a Manager in the America's Division at the U.S. Chamber of Commerce and supports the U.S.-Colombia Business Council, U.S.-Cuba Business Council, and Coalition for the Rule of Law in Global Markets.
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