Colombia's New Tax Reform Faces Political Hurdles

The Colombian government introduced a significant tax reform bill to Congress on Monday, aimed at raising 26.3 trillion pesos ($6.54 billion) for the 2026 fiscal budget. Finance Minister German Avila emphasized the necessity of this reform to address the country's tightening financial constraints.

With legislative and presidential elections looming next August, the reform's future hangs in the balance. Analysts and politicians suggest the campaign season could complicate its passage, as President Gustavo Petro's administration lacks strong congressional backing.

The proposed amount surpasses the 19 trillion pesos forecasted in June's Medium-Term Fiscal Framework. Avila stressed that the reform aims to ensure fiscal stability through 2027. President Petro warned that failure to pass the bill would result in increased borrowing to meet budget shortfalls.

(With inputs from agencies.)