We agree that tax reform is necessary. But the cure cannot be greater than the disease. Today’s technology is humanity’s most powerful tool for creating equality and wealth. generates income opportunities, especially for young people; Accelerates financial inclusion and formalization; makes everyday life easier; eliminating paperwork; among others.
Therefore, it is imperative that the Ministry of Finance, the DIAN and the third commissions of the Senate and the Chamber correct some of the errors made in good faith in the initial version of the tax reform that caused tremendous damage to the Colombian digital ecosystem:
1. Let’s not kill the unicorns of the future
This tax reform makes property tax for individuals permanent, taxes it at 72,000 uvt (just over $2,700 million in current currency) and qualifies it with progress criteria.
What is the problem? Basically, startups are usually financed with venture capital, of which they register a valuation based on their future projections, but not on their equity or liquidity. And the Tax Reform says that the DIAN will take the intrinsic value of companies as a reference when calculating the annual value of property taxes. Then, entrepreneurs will have to go into debt to pay this tax or, alternatively, spend an important part of the risk investment they receive on their tax obligations, instead of injecting it into marketing or specialized human talent. which helps them grow.
In other words: with this reform, entrepreneurs will have to respond to wealth tax with money they don’t really have. And many people will surely move their talents, their ideas and their capital to other countries with better fiscal conditions.
Technological giants (unicorns) like Rappi, Truora, Platzi and Habi were born in Colombia. Almost always, at the tip of venture capital. If this bug is not fixed, there will hardly be many more success stories.
2. The new taxes on digital platforms isolate us internationally and scare away investments
Tax reform proposes a new tax on digital platforms, through important figures of economic presence. Basically, it forces companies domiciled abroad and carrying out economic activities in Colombia, especially (but not exclusively) technology, to pay income tax.
We agree that digital platforms should pay taxes. In fact, they have been liable for VAT for many years. But the devil is in the details. Let’s look:
– Does anyone understand that when the Ministry of Finance intends to impose new taxes on mobility platforms, traffic policemen fine their drivers for the simple fact of working? Let’s regulate this service first and then talk about the rest.
– The OECD has already given a line on the taxation of digital platforms through the BEPS program, so that the money from their taxes does not stay in the countries of tax residence, but also reaches the countries where they generate income. In this way we can also get the collection. The OECD has insisted that member states (such as Colombia) should not take unilateral measures on the issue, which they do with tax reform.
Such measures alienate us from the OECD, put us under unnecessary diplomatic strain, scare away foreign investment and take away choices from digital consumers.
– Article 11.5 of the FTA with the United States literally states that “any party shall permit a service supplier of another party to establish or maintain a representative office or any other form of business, or to cross a party, it may not be required to be a resident in your area as a condition. – Limit the offer of a service.” In other words, what makes a figure of significant economic presence.
Technology must have priority in times of political change, citizen empowerment and generational change. And it doesn’t start by suffocating it through tax reform. Fortunately, the administration and Congress have had enough time to make the necessary adjustments.
@lopezjosedaniel
alliance in. executive director of