colombianherald.com

The Ministry of Finance of the Petro government has set off alarms in the financial sector and among millions of users with a draft decree that seeks to apply a withholding tax of 1.5% to payments and transactions made through digital platforms such as Bre-B, Nequi and Daviplata. The measure, which according to the portfolio is not a new tax but a regulatory adjustment, has been described as a “terrible signal” by unions and experts, who warn of a negative impact on the country’s financial inclusion and formalization.

The Government’s justification is to equate the tax treatment of digital transactions with that currently applied to payments made with debit and credit cards, which already have a withholding of 1.5%. According to the Ministry, this disparity generated “arbitrage” between the different payment methods.

Financial Inclusion at Risk

The proposal has generated immediate rejection from leaders in the fintech and banking sectors. Colombia Fintech warned that imposing a withholding on Bre-B transactions—the immediate payments platform of the Bank of the Republic that has just become fully operational—could slow down its mass adoption and discourage economic formalization, especially among microbusinesses and small merchants.

For these small businesses, a 1.5% withholding means a direct hit to their cash flow and profits, which, according to critics, will encourage a return to the use of cash and informality. Presidential candidates such as David Luna have also questioned the measure, calling it a “bad idea” and pointing out that it punishes interoperability and competition.

The Ministry of Finance clarified that withholding will not be made if the payment does not constitute tax income for the recipient and natural persons who are not responsible for VAT will not be subject to withholding. However, the draft decree, which is in the publication phase for comments and observations, has opened a deep crack in the debate about how economic digitalization should be promoted in Colombia.

Outrage over the Petro government project that would basically apply 15×1000 to Bre-b, Nequi and Daviplata

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