Colombia’s President Ivan Duque on Friday signed the Ley 2010 del 27 de Diciembre de 2019, called Ley de Crecimiento Económico (Economic Growth Law) after it was approved by Colombia’s congress. The administration hopes the law will spur Foreign Direct Investment (FDI) – Inversión Extranjera Directa (IED) in Spanish – and grow the country’s Gross Domestic Product (GDP).

Colombia president Iván Duque Márquez signing on Friday the Ley 2010 del 27 de Diciembre de 2019, called Ley de Crecimiento Económico (Economic Growth Law)

The law includes a tax credit designed to offset Value-Added Tax (IVA) to the poorest 20% of households, about 2.8 million households; a reduction in health contributions from 12 to 4% for the most vulnerable pensioners and incentives to companies that create jobs for young people between 18 and 28 years old.

“This reform will allow us to continue increasing resources for education, for health, for home improvement, to bring aqueduct to the most vulnerable areas of our country. So, clearly, it is a Law that drives growth, but that gives us more resources for social investment,” said Duque.

More measures

The Law establishes income tax benefits for large, medium, small and micro enterprises, which, in addition, will have a VAT discount for imported capital goods, in order to reduce costs so that the business apparatus is modernized more quickly and produce cheaper.

Likewise, it creates the “SIMPLE” taxation mechanism, through which compliance with the tax obligations of micro and small businesses is simplified. In a single form, they can liquidate their tax obligations of income and ICA, reducing their costs and promoting formalization.

The Law will allow the Government to raise more resources to invest in tertiary roads and improve the competitiveness of the regions.

The full text of the Law 2010 can be found at: Ley 2010 del 27 de diciembre de 2019