BOGOTA, Oct 22 (Reuters) – Colombia’s government on Tuesday presented a new tax reform proposal to congress, after the constitutional court overturned a previous version of the measure last week.
The court ruled in a 6-3 vote that the law would remain valid only through the end of 2019 because it was not properly published in the legislative gazette between votes in the lower and upper houses, violating normal procedure.
The new bill includes the same provisions as the former, Finance Minister Alberto Carrasquilla said, but removes provisions that apply to this year.
“We are proposing exactly the same text, it has some small differences because the year has passed,” Carrasquilla told reporters in the offices of the lower house, adding that the proposal was sound.
The bill must be passed before the end of the year to avoid legal consequences outlined by the court.
The court’s decision had forced right-wing President Ivan Duque’s government into a scramble to pass a new bill that will cover 2020 and beyond, in a bid to avoid potential financing problems and any effect on investment.
Carrasquilla warned prior to the ruling that overturning the law could hurt investor confidence and bring lower growth for Colombia’s $350-billion economy.
Resources raised by the reform will be equivalent to about 1% of gross domestic product in 2020, the government estimates.
The decision was the latest in a series of headaches for Duque, whose economic projects have faced strong opposition from lawmakers, complicating his efforts to reduce debt, boost growth and avoid a potential downgrade in credit ratings.
The finance ministry has requested that lawmakers debate and vote on the proposal urgently, it said in a statement.
The overturned law included increased income tax on high earners, a cut in business duties and an additional tax on banks’ earnings. (Reporting by Carlos Vargas; Additional reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Clarence Fernandez)