Colombia Orders Early Income Tax Payments, Sparking Business Concerns

Colombia's Treasury has mandated that companies and high-earning professionals prepay their income taxes for the upcoming year, aiming to secure funds before September. This measure is intended to address a significant deficit, but business owners are concerned about potential strains on working capital and reduced investment. The government defends the move as a necessary step to avoid deeper cuts later, citing a potential deficit of 7% of GDP. However, critics point out that a similar measure was previously condemned and worry about the long-term consequences for business and the economy. The decree particularly impacts extractive industries, requiring them to surrender a percentage of gross revenue ahead of schedule. While the government argues these sectors have seen windfall profits, industry representatives warn of potential project postponements. The business community is seeking clarity on whether this will be a one-time or recurring policy, fearing a negative impact on compliance and economic activity.