Colombia’s 2027 Budget Is Short COP 30 Trillion, and the Money Depends on a Tax Reform

Rio Times · Colombia

Colombia’s outgoing government has filed a 2027 budget that openly depends on money it does not have. About COP 30 trillion of it exists only if Congress passes a tax reform – and the president who has to win that vote takes office in five days.

Colombia’s 2027 budget lands with a COP 30 trillion question mark

Colombia’s outgoing government has filed a draft national budget for 2027 that openly depends on money it does not yet have. The spending plan, filed with Congress on Wednesday 29 July 2026 by the Ministry of Finance (Minhacienda), totals about COP 575.6 trillion, or roughly US$182.7 billion.

Tucked inside that figure is a COP 30.2 trillion hole, equivalent to roughly 1.4 percent of gross domestic product. That slice will not exist unless lawmakers first approve a new tax reform.

A foreign reader who follows our coverage might recall a much larger number from late July: COP 303 trillion in unfunded spending inside Colombia’s 2026 budget. That figure, from a June 2026 audit by the Comptroller General’s office, represents more than half of the 2026 budget as it stood in mid-execution.

The COP 30.2 trillion gap now being discussed is a fresh and separate problem, tied strictly to the 2027 budget bill. It is not a downward revision of the 2026 mess.

The two shortfalls sit side by side, each with its own timeline and set of political risks.

The 2027 filing is one of the final acts of President Gustavo Petro’s administration. Power changes hands on August 7, when president-elect Abelardo de la Espriella takes office.

His team will inherit the same congressional arithmetic that has already sunk one tax package, along with a fiscal framework that remains officially suspended until at least 2028.

The budget that lands on the new president’s desk

Minhacienda pegged total spending for next year at COP 575.6 trillion, about US$182.7 billion at today’s rate of COP 3,151 to the dollar, and a bit more than COP 28 trillion (US$9.1 billion) above the 2026 budget Congress approved. Strip out the contingent slice and the financing the government can actually point to comes to roughly COP 545.4 trillion (US$173.1 billion).

The remaining COP 30.2 trillion is listed as contingent income. In plain terms, the money does not exist until Congress creates it through a tax reform.

El Espectador, Bloomberg Línea and ColombiaOne all reported the same structure: the budget bill was submitted with an explicit funding gap, and the government’s own documents label the missing piece as dependent on fresh legislation. The figure matters because it is not a forecast rounding error.

At 5.2 percent of total planned spending, the gap is large enough to force either a tax debate or a scramble for spending cuts early in the new administration.

The independent Fiscal Rule Committee, known by its Spanish acronym CARF, has framed the challenge in even harder terms. CARF is a small technical body whose job is to check whether the government is keeping to its own legal limits on borrowing.

It projects that 2027 spending will run to 20 percent of the economy, some COP 46 trillion (US$14.6 billion) more than the Finance Ministry assumes, and calculates that hitting the government’s own 2027 target would take an adjustment worth 3.7 percent of GDP.

The COP 30.2 trillion in the draft is therefore the optimistic scenario, one that assumes Congress delivers exactly what the Finance Ministry asks for.

The 2026 budget still carries its own deep wound

To understand why a new tax debate is so fraught, it helps to look at what happened with the budget already in force. Congress approved the 2026 national budget at roughly COP 547 trillion in October 2025, after the government agreed to trim about COP 10 trillion from its original proposal.

A tax reform designed to fund part of that spending was submitted on September 1, 2025. It aimed to raise COP 26.3 trillion, through measures including a permanent surcharge on financial-sector corporate income, higher withholding on dividends sent abroad, and an increased rate for non-resident digital companies.

The Senate’s Economy Commission rejected that bill in December 2025. That left a financing gap that the approved budget’s own numbers pegged at around COP 16.3 trillion.

The government responded with emergency economic measures early in 2026, adopting temporary tax provisions to keep the lights on.

Then the picture darkened. The Comptroller General, an autonomous oversight body, examined the budget as it looked on June 16, 2026.

By that date the total had grown to COP 555.72 trillion, reflecting modifications made during the year. Only COP 252.68 trillion had identified financing.

The rest, roughly COP 303 trillion or 54.5 percent of the whole, simply had no revenue source attached.

That audit, reported by The Rio Times on 29 July, also triggered a formal probe into the Finance Ministry over a 2025 bond swap, adding a layer of legal risk to the fiscal picture.

A tax-reform graveyard and a last-minute bill

The September 2025 reform was the first casualty. Its expected yield of COP 26.3 trillion for the 2026 budget disappeared when the Senate commission voted it down.

The emergency measures that followed were stopgaps, and no single consolidated revenue figure for them has been published.

On July 20, 2026, the government tried again. It filed a new tax reform bill in Congress, seeking COP 21.9 trillion of additional revenue in 2027, equal to 1.0 percent of GDP, with a permanent yield averaging 1.5 percent of GDP from 2028 onward. The bill explicitly invokes the escape clause of Colombia’s fiscal rule. That rule, which normally caps deficits and debt, was suspended in 2025 and is not scheduled for full reinstatement until 2028. Using the escape clause allows the government to run larger deficits in the short term while presenting a medium-term consolidation path.

Whether the July 2026 bill can pass before the presidential handover or early in the new government’s term is an open question. Congressional arithmetic has not changed materially since the December 2025 rejection.

If the bill stalls or is watered down, the COP 30.2 trillion hole in the 2027 budget remains unfilled, forcing the new finance minister to choose between deep spending cuts or another emergency tax package.

The deficit, the central bank and the rating agencies

Multiple projections put Colombia’s 2026 fiscal deficit well above the government’s official target. The Finance Ministry’s medium-term fiscal framework, published on 12 June 2026, raised the 2026 deficit target to 5.3 percent of GDP, up from the 5.1 percent it had set in March.

Independent estimates are considerably starker. CARF put the 2026 total deficit at 7.4 percent of GDP in June and called it clearly unsustainable.

Banco de Bogotá has told clients the incoming government inherits a shortfall near 6.7 percent.

The Economist Intelligence Unit expects 6.6 percent, which would be the third-largest fiscal shortfall in the world this year. Other analysts cluster around 6.2 percent.

There is no single realised number yet because 2026 is still in progress, but the gap between the official target and outside estimates is wide and persistent.

Monetary policy gives little room for fiscal relief. The Banco de la República, Colombia’s central bank, held its policy rate at 12.0 percent on July 31 in a tight 4-3 vote, with June inflation running at an annual 6.1 percent.

High rates keep government borrowing costs elevated and make deficit financing more expensive, something the Finance Ministry must factor into every bond auction and debt management decision.

Credit rating agencies have not announced formal downgrades in 2026, so far, but their commentary has been pointed. Moody’s warned in March that reducing the deficit to 5.1 percent of GDP would not represent a structural adjustment, given the underlying debt trajectory.

Colombia remains below investment grade, with debt above 60 percent of GDP, and analysts at BBVA Research have noted that high deficits keep constant pressure on the sovereign rating.

What the transition hands over

President-elect De la Espriella will receive a 2027 budget bill that is already in Congress, a fiscal rule that is formally suspended, a central bank keeping rates at a restrictive 12.0 percent, and a tax reform bill filed just weeks before the handover. The COP 30.2 trillion contingent in the budget is not a hidden trap. It is identified in the draft, labelled as dependent on a reform, and sized at about one-twentieth of total spending.

The broader 2026 financing gap, the one the Comptroller measured at COP 303 trillion, is a separate and larger problem that belongs to the current budget year. The two deficits are not additive in a simple way, but they sit on the same desk.

The new administration will have to manage both: find cash for the remainder of 2026 while convincing Congress to fund the 2027 plan it has just received.

Frequently Asked Questions

How big is the hole in Colombia’s 2027 budget?

About COP 30.2 trillion, roughly 1.4% of GDP and about 5.2% of the COP 575.6 trillion the government wants to spend. It is listed in the bill as contingent income, meaning it only appears if Congress passes a tax reform.

Is this the same as the COP 303 trillion figure reported in July?

No. That figure comes from the Comptroller General’s audit of the 2026 budget, where 54.5% of the COP 555.72 trillion total was found to be unfunded.

The COP 30.2 trillion is a separate gap in the 2027 bill.

Who has to solve it?

Abelardo de la Espriella, who takes office as president on 7 August 2026. He inherits the budget bill, a suspended fiscal rule and a central bank holding its rate at 12.0%.

Sources: Ministerio de Hacienda y Crédito Público, Rio Times – the Comptroller’s bond-swap probe, Rio Times – the central bank holds at 12%

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