The Ministry of Finance published for comments a decree draft that would substantially modify self -retention rates at the source and the minimum bases to practice retention of income tax. The proposal seeks to align the fiscal collection with the new economic dynamics of the country.
In the midst of an economic environment characterized by the reactivation and recent jurisprudential changes, the National Government, through the Ministry of Finance and Public Credit, has made available to the public a draft decree that includes a deep reform to self -retention rates and the conditions to apply retention in the source.
Although it has not yet been formalized, the document has already aroused the interest of various economic and tax sectors.
Ministry of Public Treasury Decree Decree to modify withholdings and tax self -relief rates
A proposal that responds to new economic conditions: The draft proposes to replace multiple articles of Decree 1625 of 2016, which is the regulatory compendium of the tax regulations in Colombia. The modifications focus on the chapters related to self -retention rates and the minimum thresholds to apply withholdings, key aspects for anticipated collection of income tax.
The document was supported with a study by the General Directorate of Macroeconomic Policy of the Ministry of Finance, in which it is argued that the economic conditions of 2024 – a year with a growth rate almost three times higher than that of 2023 – justify an update of the tax system.
Sectors such as Agriculture, Construction and Mining have had an outstanding performance, which, according to the Ministry, requires a proportional adjustment in fiscal policy.
Why is it important: Although it is a draft, the scope of the suggested changes would significantly impact the fiscal behavior of companies and taxpayers. One of the nerve points is the existence of broad gaps between current self -retention and the tax effectively caused, especially in extractive and productive sectors.
The Tax Administration considers that this lag has represented an opportunity cost in terms of collection, which is why it proposes to adjust the self -retention rates to reflect the economic reality of taxpayers.
Likewise, the draft responds to Judgment C-489 of 2023 of the Constitutional Court, which knocked down the prohibition of deducting royalties paid by the mining-energy sector, which forced the Executive to rethink the tax model of these activities.
DETAIL DETAIL: Among the most relevant changes, the draft states that:
- Payments for services below Two Tax Value Units (UVT) They will not be subject to retention.
- In the agricultural sector, retention will not apply if the payment does not exceed 70 uvt. To exceed that figure, a rate of the 1,5%.
- For him Parchment coffee or cherrythe retention rate would be 0,5% When the value exceeds the 70 UVT, with a sum by date and by seller-computer.
- In the purchase of oro On the part of international marketing societies, the rate would be of the 2,5%.
In addition, article 1.2.6.8 proposes a detailed table of tariffs for economic activity for self -realities. For example:
- Crude oil extraction: 2,7%.
- Coal extraction: up to 4.5% depending on the type.
- Cattle raising and agricultural crops: 1,2%.
- Food fishing and processing: between 0.55% and 1.2%.
- Road construction or buildings: between 1.1% and 3.5%.
In total, the proposal covers dozens of CIIU codes, affecting multiple economic sectors, from manufacturing to financial services and technology.
General context and panorama: This initiative is part of a broader process of tax update promoted by the National Government, in order to make the system more efficient and strengthen collection without creating new tax burdens, but adjusting the existing ones. The declared intention is to improve system progressivity and reduce evasion levels.
The draft also highlights the good performance of the coffee sector, which had a historical year in 2024 thanks to the renewal of crops and international prices at record levels. By 2025, this trend is expected to continue, consolidating coffee as one of the country’s fiscal engines.
What follows: The document was published for comments on the Portal of the Ministry of Finance, in compliance with the regulations on regulatory transparency. The observations of citizens, unions and experts may be taken into account before the final version of the decree, which is expected to be issued at the end of April.
If approved, the new rules would begin to govern as of May 1, 2025. Until then, current rates will remain in force.
Although it is a preliminary proposal, the decree draft could reconfigure the map of tax obligations in Colombia. Its impact will be particularly felt in sectors with strong export dynamics and in those who have shown greater reactivation. The key will be to achieve a balance between collecting efficiency and business sustainability.
Also read: World Bank reduces Colombian economic growth forecast by 2025 to 2.4%
