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Colombia to cut VAT to 17% by 2021

  • Nov 9, 2018 | Richard Asquith

Colombia to cut VAT to 17% by 2021

Colombia is proposing that it cuts its VAT rate to help boost the struggling economy. There is a proposed two-stage decrease from today’s 19%: going to 18% on 1 January 2019; and then to 17% in 2021. VAT was originally raised from 16% to 19% in 2016.

Colombia will also extend the tax net by removing exemptions and nil rating from 2019 on a range of staples to help fund the decrease. This will be mostly basic foodstuffs. The less well-off will be compensated by direct payments from governments. Products that will remain outside of the net will include: medicine; health; education; public utilities and transport

The new Duque government needs to stabilise revenues as it seeks to retain a fragile credit rating, currently just above ‘junk’ rating with major agencies.


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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara