According to government figures, Colombia took in 126.7 trillion pesos ($42.5 billion USD) in tax revenues last year, a 2.4% jump over the 123.7 trillion collected in 2015.
Though the revenue increase was helpful for federal coffers that have been hard hit by the drop in oil prices over the past two years, this still came in below the target of 130.1 trillion pesos set by the administration of President Juan Manual Santos, according to the National Directorate of Taxes and Customs.
The fall in oil royalties brought in since the price of crude tumbled in the fall of 2014 was the main driver of a major tax reform law that passed in late December. The government saw its credit rating put on negative outlook by both Fitch Ratings and Standard and Poor’s in 2015, leading to increased concern that Colombia could lose its coveted BBB rating and reputation among international investors.
The overhaul, among other revenue-generating policies, rose the national value-added tax on most products from 16% to 19%, a controversial move that has drawn protest in many Colombian cities and opposition from rival politicians.
With the reform now implemented into law, officials expected the 2016 tax revenue number to grow even further in 2017.
Photo credit: Philip Taylor