COLOMBIA Trends and Developments Contributed by: Rodrigo Castillo Cottin, Ana María López and Alejandra Becerra, Rimon, P.C.
Rimon, P.C. Calle 84A No 10–33
Oficina 803 Bogotá DC 110221 Colombia Tel: +57 1514 2858 Email: bogota@rimonlaw.com Web: www.rimonlaw.com
Colombia’s fiscal outlook in 2025 reflects a complex environment shaped by increased public spending, modest revenue performance, and a global context still marked by economic uncertainty. The central gov - ernment deficit reached approximately 6.8% of GDP in 2024, prompting the use of the fiscal rule’s “escape clause” and pushing public debt above 61% of GDP. To manage financing needs, the current administration has diversified funding through mechanisms such as green bond issuances and public-private partnerships (PPPs), especially in infrastructure and energy. Although the 2022 tax reform produced strong results in its first year, revenue growth has since slowed, underscoring the challenge of sustaining fiscal per - formance without additional structural measures. In this context, administrative actions have gained prominence, including recent adjustments to stamp tax and withholding rules implemented via executive decrees, alongside the Colombian Tax Office’s push to modernise its systems and integrate AI into its audit and enforcement programmes. A new comprehensive tax reform has not been passed since Law 2277 of 2022, and given the current political landscape, characterised by ongoing negotiations in Congress and the proximity to the 2026 presidential elections, such an initiative is unlikely to move forward in the near future. However, the government continues to explore alternatives to strengthen public finances while maintaining policy space for social investment. Businesses operating in Colombia should monitor fis - cal developments closely, particularly regarding regu -
latory changes and their potential impact on financing, tax compliance, and investment planning. Net Worth Tax: Judicial Review Without Substantive Ruling Among the key trends and developments shaping the year, it is worth noting the outcome of the constitution - al challenges filed against the net worth tax introduced under Law 2277 of 2022. Several lawsuits sought to contest the tax’s validity on grounds of equality and taxing authority, but the Constitutional Court declined to rule on the merits, citing procedural deficiencies in most cases. By declaring itself unable to issue a substantive deci - sion, the court left the tax fully in place. This outcome reinforces its continued enforceability and confirms its role as a recurring element in Colombia’s fiscal frame - work. While the door remains open for future chal - lenges that meet procedural requirements, the court’s position provides short-term legal certainty regarding In the absence of a viable path for structural tax reform, the Colombian government has increasingly relied on temporary measures issued via emergency decrees. This trend reflects both the urgency of addressing short-term fiscal needs and the constraints posed by a fragmented Congress, where no party or coalition commands a stable majority. In this context, the exec - utive branch has resorted to administrative tools to manage revenue pressures with greater agility, albeit not without legal and political debate. the enforceability of this tax. Emergency Tax Measures
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