Join the conversation:

Colombia will Increase Taxes of its Richest Citizens

Colombia will Increase Taxes of its Richest Citizens

Posted by Juan Gavasa on September 09, 2014

Colombia is seeking to increase taxes on the net wealth of its richest citizens in line with proposals laid out by French economist Thomas Piketty in his bestseller “Capital in the Twenty-First Century.”

The government will impose a 2.25 percent annual tax on wealth of more than 8 billion pesos ($4.1 million), Deputy Finance Minister Andres Escobar told reporters in Bogota last night. Smaller fortunes will pay lower rates, with capital of less than 750 million pesos paying nothing, Escobar said.

“The important thing is to tell wealthy Colombians, people who have a lot of economic capacity, that it’s necessary to pay a bit more tax,” Finance Minister Mauricio Cardenas said yesterday in a radio interview. “We need a wealth tax where the great fortunes in our country make a bigger contribution.”

Colombia is one of the world’s most unequal societies, according to Piketty’s World Top Incomes Database, with the top 1 percent of earners having a 20 percent share of national income in 2010, compared to 17 percent in the U.S. In April, Cardenas said in posts on Twitter that Piketty’s book is “of great relevance to Colombia” and that “these ideas will very soon be fueling our debate.”

The reform replaces a previous wealth tax, which charged tax payers a lump sum based on their declared net wealth Jan. 1, 2011, with the amount payable over four years. The top rate was 6 percent, equivalent to 1.5 per year over the four-year period.

Link To Full Article: 

Facebook comments



Monthly newsletter featuring articles hand picked by our country managers from the best content across PanamericanWorld.



Monthly newsletter featuring articles hand picked by our country managers from the best content across the Caribbean Region on PanamericanWorld.

PANAMERICANWORLD COUNTRIES