Colombia's government hopes to enact a structural reform designed to curb tax evasion this year and plans to issue $1.5 billion in global bonds during the first quarter, Finance Minister Mauricio Cardenas said on Wednesday. Tax changes are "about making sure our tax system deals in a more effective way with tax evasion, widens the tax base ... so that it's not just a few corporations and individuals that take most of the tax burden," Cardenas told Reuters on the sidelines of a Morgan Stanley-hosted conference in Florida.
Higher duty collection could offer the government some relief from the global fall in oil prices, which has cut national income as inflation has spiked. Oil is Colombia's top export and source of foreign exchange, accounting for around a fifth of national income. The comprehensive changes will touch on everything from corporate and personal income tax to value-added tax, Cardenas said, and the government aims to take a bill to Congress "as soon as possible."
An expert commission examining possible reforms will report its findings to the government this month. Colombia will issue the remaining half of global bonds it plans for the year during the first quarter, the minister said, after pre-financing $1.5 billion during 2015. "We already did 1.5 pre-financing last year, the other 1.5 sometime in the first quarter."
Cardenas had told Reuters in December that the Andean country could issue international debt as soon as this month to help finance its spending this year. Policymakers on the country's central bank board began raising the benchmark interest rate in September in a bid to control inflation, which reached 6.77 percent in 2015. That figure is well above the central bank's long-term target of between 2 and 4 percent.
Minutes from the December meeting showed that some board members supported a sharper 50-point rise in the rate, instead of the 25 points approved by majority. "It's clear in the minutes that there are different views within the board in terms of the pace at which rates should be increased, but the majority view has been 25 basis points," Cardenas said. Inflation will fall to 5 percent this year, he said, and to within the target range during 2017.