The Colombian government warns that the country may be unable to meet its debt obligations if the national legislature blocks a proposed overhaul of its public finances. Vice President José Manuel Restrepo told Semana magazine that passing the “economic rescue” law is essential to prevent a sovereign default, as the bill enters its final debate in the Senate amidst opposition from several political blocs.
The 106 article proposal seeks to close a fiscal gap by shrinking the state from 209 to 104 entities and reducing contractor payments by 50% in 2027. To raise revenue, the government would apply a 19% value-added tax to goods such as coffee and internet services, while lowering the income tax threshold for individuals to 720 UVT. The administration estimates these measures would save COP 44.6 trillion in 2027 and COP 76.1 trillion by 2030.