BOGOTA (Reuters) – Colombia’s Constitutional Court has struck down part of a law that prohibited extractive companies from deducting royalties paid to the government from their taxable income, benefiting businesses and dealing a blow to government finances.
The rule was included in a tax reform from the government of leftist President Gustavo Petro, which was approved by Congress and came into effect this year, as part of efforts to fund programs aimed at tackling poverty and inequality.
“After the regulatory integration, the entire censored paragraph was declared unenforceable,” the court said in a statement late on Thursday.
Colombia’s Finance Ministry expected to collect 3.38 trillion pesos ($829 million) with the measure this year, followed by 2.79 trillion pesos in 2024 and some 2.2 trillion pesos in 2025.
“Following this decision, which I cannot agree with, it’s up to the finance minister to cut the budget of the three branches of public power,” Petro said in a message on X, referring to Colombia’s Congress, executive and judiciary.
The court’s ruling shows Colombia’s institutions are strong, said political analyst Sergio Guzman, director of Colombia Risk…
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