colombianherald.com

In a decision that marks a before and after at the close of fiscal year 2025, the Government of President Gustavo Petro signed Decree 1390 of December 22, 2025, by which the State of Economic and Social Emergency is declared throughout the Colombian territory. This exceptional measure, protected by article 215 of the Political Constitution, will have an initial validity of 30 calendar days and seeks to avert what the Executive qualifies as a “serious disturbance of the economic order.”

The declaration comes just days after the Congress of the Republic definitively sunk the Financing Law, which sought to raise nearly $16.3 billion pesos necessary to balance the General Budget of the Nation for 2026. Given the lack of these resources, the president warned that the country faces an “unsustainable” fiscal imbalance that compromises essential services such as health and security.

The 5 key reasons behind Decree 1390

The 20-page document, signed by the entire ministerial cabinet, exposes a series of factors that, according to the Government, constitute a crisis that cannot be addressed through ordinary legislative means. These are the neuralgic points:

Critical Fiscal Deficit: The deficit closed 2024 at 6.7% of GDP and is projected to climb to 7.1% in 2025, a figure that limits the State’s ability to maneuver.

Crisis in the Health System: Compliance with an order from the Constitutional Court forces the UPC (Capitation Payment Unit) of the subsidized regime to be equated with the contributory regime, which generates an immediate financial gap of $3.3 billion.

National Security and Public Order: The increase in drone attacks against the Public Force in departments such as Cauca and Cesar requires urgent investments in defense technology that were not budgeted.

Energy Subsidies: There is an imminent risk of non-payment of subsidies for strata 1, 2 and 3, especially in the Caribbean region, which could lead to a social crisis.

Legislative Collapse: The Government argues that the fact that Congress approves a budget and then denies the resources to finance it is a “supervene and unforeseen” event.

You may be interested: We don’t lose hope! We are looking for Sasha, a dog lost since March in the La Libertad neighborhood of Medellín

What taxes are coming? The impact on Colombians

With the signing of this decree, the Executive is empowered to issue regulations with the force of law without going through prior debate in Congress. Although legislative decrees must be sent to the Constitutional Court for review, their application is usually immediate.

Sources from the Ministry of Finance, led by Germán Ávila, have indicated that the new taxes will seek to replicate the essence of the failed tax reform, focusing on:

Tax on gambling: It is being evaluated to apply a 19% VAT to online bets and deposits on platforms.

Surtax on the extractive sector: New taxes on oil and coal production.

Tax on the “Megarrich”: Petro has been emphatic that the burden should fall on the sectors with the greatest wealth.

Tax on Financial Movements (possible 5×1,000): Although it is an unpopular measure, it is on the table as a quick collection mechanism.

The legal battle: Is the emergency constitutional?

The declaration has not been exempt from strong political and legal resistance. Analysts and former magistrates warn that the Government could be falling into a “constitutional trap.” According to experts consulted by Minuto30, the Constitutional Court has historically and rigorously been strict in defining what a “supervening event” is.

“The collapse of a law in Congress is a foreseeable democratic exercise, not a natural disaster or an unforeseen event. The Government knew that it did not have the majorities,” say critical voices from the opposition.

If the Constitutional Court manages to “overthrow” the emergency in its substantive review (which would occur after the judicial vacancy in January 2026), the Government would be forced to return the proceeds or face an even greater legal vacuum.

Why do Colombians care about this measure?

If you are a merchant, the new taxes could affect your cash flow.

If you are a user of the health system, the lack of resources or their redistribution will impact the delivery of medications.

If you have savings or make frequent transactions, monitor changes in the GMF (4×1,000).

What’s next on the political schedule

Issuance of tax decrees: Expected in the next 48 hours.

Political Control: Congress will be convened 10 days after the expiration of the emergency to evaluate the use of the powers.

Court Review: The high court will receive the decree this December, but the in-depth analysis will begin after January 10, 2026.

Petro made the economic emergency official: he will have superpowers and will be able to impose all the taxes he wants

Source link