The National Government suffered a significant political defeat in the legislature. The Fourth Commission of the Senate of the Republic decided to archive the project of the new tax reform (presented as the Financing Law), with which the Executive sought to raise additional resources to cover the fiscal gap in the 2025 budget.

The decision, which puts an end to the process of this initiative, was forceful and occurred in the first debate.

Voting details

The initiative failed to convince the legislators in charge of economic affairs. The archiving proposal received nine votes, a sufficient majority to sink the project promoted by President Gustavo Petro and his economic team.

This result reflects the lack of political environment and the refusal of several groups to increase the tax burden in the current economic context of the country.

Why was this reform presented?

The Government sought to approve this law to obtain nearly 12 billion additional pesos. According to the Ministry of Finance, these resources were essential to complete the 2025 General Budget of the Nation and finance key social and investment programs for the Development Plan.

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What will happen now with the country’s money?

When the reform (Financing Law) falls, the Government is left in a complex financial situation:

Defunding: The budget for 2025 is “defunded” in the amount that was expected to be raised.

Cutting expenses: The Executive will be forced to make a cut in public spending for next year, since it will not have the extra income that this law promised.

Decree: The Government will likely have to adjust the figures through decrees to balance the books without the new taxes.