Colombia’s July 20 Tax Reform: The Handover Fight and What It Means for Foreigners
Colombia · Taxes
Key Facts
- The plan. The outgoing Petro government intends to file a new tax reform in Congress on July 20.
- The pushback. The incoming government has formally asked it not to, arguing fiscal policy is the next administration’s call.
- The stakes. A reform could touch VAT and income taxes that reach foreign residents, though nothing is law yet.
- The handover. President-elect De la Espriella takes office on August 7; the transition runs to July 31.
- For residents. No tax changes take effect now; this is a fight over timing and who designs them.
*Colombia's outgoing Petro government plans to file a tax reform on July 20, but President-elect De la Espriella's incoming administration has formally asked it not to, arguing fiscal policy should wait until after the August 7 handover.*
Colombia’s change of government has opened with a fight over taxes. The outgoing administration wants to file a new tax reform in its final weeks, and the incoming team is publicly asking it to hold off — a standoff that could shape what residents pay.
A tax reform on the way out
The outgoing government of Gustavo Petro plans to present a new tax reform, or financing law, in Congress on July 20, weeks before it leaves office. Its finance minister, Germán Ávila, says the measure is needed to fund existing programs and keep the budget balanced.
Framing it as a parting act, the administration wants to leave the fiscal groundwork in place for its successor. Colombia has seen several tax reforms in recent years, each closely watched by businesses and residents.
The incoming team says no
The president-elect’s transition chief, vice-president-elect José Manuel Restrepo, has formally asked the government not to file the bill. He argues that designing any fiscal adjustment is the incoming administration’s prerogative, not a task for the outgoing one’s final days.
The request came as the two sides opened formal handover talks, which are set to run through July 31. Petro, for his part, has taunted that the incoming government’s own reform could end up taxing basic goods.
What it could mean for residents
For foreigners living in Colombia, the immediate answer is that nothing changes today, and no rate moves on the strength of a filing or a dispute. Any reform would still have to pass a divided Congress before taking effect.
The reason to watch is what a reform might contain. Colombian tax residents are taxed on worldwide income, so changes to income-tax brackets, VAT or wealth taxes would reach many expats, not just locals.
The cabinet taking shape
The incoming government has now named three ministers: Miguel Gómez at Finance, Rodrigo Lara at Interior and Fabio Arjona at Environment. Gómez, the market-friendly Hacienda pick, will own whatever fiscal plan the new administration pursues.
Defense, foreign affairs and other posts remain unfilled, with names still circulating in the press. The full cabinet should become clear before the August 7 inauguration.
What to watch
The near-term flashpoint is July 20, when Congress reconvenes and the government could formally file its bill. Whether it does so over the incoming team’s objection will set the tone for the handover.
Beyond that, the signal that matters for residents is the incoming government’s own fiscal plan, expected after it takes office. Until then, current tax rules stand.
Frequently Asked Questions
Is Colombia raising taxes now?
No. A reform has been announced for July 20 but is not law, and nothing changes for residents today.
Why is there a dispute?
The outgoing government wants to file a tax reform in its final weeks, and the incoming team says fiscal policy should be its own call. Both sides are now in formal handover talks.
Would a reform affect foreigners?
It could. Colombian tax residents are taxed on worldwide income, so changes to income tax, VAT or wealth taxes would reach many expats.
When does the new government take office?
President-elect De la Espriella is inaugurated on August 7, and the transition runs to July 31. His finance minister is Miguel Gómez.
What should residents do now?
Nothing urgent, since no rule has changed. Watch the July 20 congressional session and the incoming government’s fiscal plans, and take advice if you have complex income.
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