On October 29, 2026, the Ministry of Finance filed the Economic Rescue Law bill with the House of Representatives. According to the Government, most of the fiscal adjustment would come from cutting State spending and, to a lesser extent, from tax changes aimed at lowering corporate income tax, increasing the burden on higher-income individuals, broadening the VAT base and strengthening health and environmental taxes.
The bill has just begun its passage through Congress and its content may change. These are the most relevant changes:
- Corporate income tax: the general rate would fall from the current 35% to 33% in 2027 and 31% from 2028.
- Individual income tax: a new 9% bracket would be introduced and the 39% rate would apply from COP 454 million of taxable income (currently, from COP 1,624 million).
- VAT: from 2028 there would be a single 19% rate and the 5% rate would disappear. The EfectIVA refund would be created for vulnerable households.
- Net wealth tax: it would only apply between 2027 and 2030, to net assets of COP 5,002 million or more, with rates of 0.5% and 1%.
- RUGE: a new optional regime for large investments, with a 20% income tax rate for projects starting in 2027 or 2028 and 16 years of legal stability.
- Health and environmental taxes: taxes on spirits, beer, cigarettes and vaping products would rise, and the carbon tax would go from COP 29,070 to COP 83,275 per ton of CO₂ in 2029.
- Payroll: the exemption from payroll contributions would be limited to salaries of up to COP 3.5 million.
- Relief measures: a 60% discount on penalties until June 30, 2027.
Download the full Newsflash for the details of each change, the implementation timeline and examples of the impact.
