Colombia to Give Tax Breaks for Infrastructure, Social Projects After Peace Deal Is Signed

Colombia still has to sign a formal peace accord with the Revolutionary Armed Forces of Colombia (FARC), but last week’s bilateral ceasefire pushed the nation towards a post-conflict reality. The government expects major economic growth to emerge once more than a half-century of war ends, and it plans to offer significant tax incentives to entice companies into projects related to infrastructure and social development, according to Reuters.

Rafael Pardo, the nation’s labor minister, said the goal is to speed along the process of getting private-sector firms involved in building schools, health centers, roads, water infrastructure, and sanitation projects. The initiative will focus on areas that have been isolated and underdeveloped due to decades of conflict.

“It means doing projects probably more quickly and in a more efficient way, and for the companies it is a benefit in the sense that they want to have a presence in a certain region,” Pardo told Reuters.

He didn’t offer details of the incentives, but noted that “the cost of the project will be deducted from their taxes. The plan will begin once the final peace deal is signed, which Colombian President Juan Manuel Santos hopes will happen before July 20, which is the country’s independence day.

Even without these post-conflict tax breaks, Colombia has been pumping investment into infrastructure. Billions of dollars have already gone into its so-called “Fourth Generation” — or “4G” — plan to revamp some 5,000 miles of roads, bridges, and tunnels throughout the country. The project is expected to be complete by 2023.

(Photo: Labor Minister Rafael Rafael Pardo Rueda speaks to a crowd in Bogotá. Credit: Ministerio TIC Colombia)