Colombia’s government will send its tax bill to Congress this week, seeking to reform and streamline taxes and promote investment. One of the main pillars of the bill is the reduction of Colombia’s corporate income tax rate – currently one of the highest in South America – from 38.5% down to 32% by 2009. It also seeks changes to value-added tax (VAT) by introducing an additional level of VAT, rated at 10%, on staple foods. The VAT change is likely to meet resistance in Congress as it will affect all levels of society. The financial transaction tax of 0.04% looks set to remain, despite talk of it being reduced or even scrapped. There is also likely to be a new assets tax, perhaps at around 0.3%, for assets above the $0.5 million mark. The tax reforms, which overall will help to simplify and streamline the tax system in Colombia, is seen as a positive step forward by the markets.
Category: Regions
García Picks Carranza As Finance Minister
Peru’s president-elect, Alan García, has picked Luis Carranza Ugarte as his finance minister when he takes office at the end of this month. Carranza, an economist, served as deputy finance minister under Alejandro Toledo and as a director of the Central Bank. He will join from his current position at Banco Bilbao Vizcaya Argentaria (BBVA) in Spain. García also appointed José Antonio García Belaunde, a career diplomat, as foreign affairs minister.
Ecuador And India Agree To Energy Cooperation
Ecuador and India have signed a memorandum of understanding to jointly develop their petroleum, gas, electricity and petrochemical sectors. The MoU was signed via the countries’ respective state-run oil companies, Petroecuador and ONGC Videsh (the overseas investment arm of India’s Oil and Natural Gas Corp) during a visit to New Delhi by Ecuador’s foreign minister, Francisco Carrion Mena. India is keen to buy energy reserves to fuel its fast-expanding economy.
ProInversion Predicts $100 Million Airports Investment
Peru’s private investment promotion agency ProInversion has said it expects the first stage of the country’s regional airports concessions process to attract around $100 million in investments. The Agency will be accepting bids August 16 and will award the concession shortly thereafter. Concessions will be awarded for the operation and maintenance of nine of the 12 regional airports for the next 25 years with a possible extension up to 60 years. Interested parties include Aeropuertos Unidos del Perú and Swissport GBH-Aeropuertos.
Mercosur And Cuba To Sign Agreement
Almost a quarter of all products traded between Mercosur countries and Cuba will soon be free of all duty, following an agreement between the trading bloc and the Caribbean country. The accord, due to be signed today, July 20, at the Mercosur meeting in Córdoba, Argentina, doubles the number of goods currently exchanged, tariff free, between the trading partners. This week, Argentina will be handing the Mercosur chair for the next six months to Brazil.
Bolivia To Audit Oil Companies
Bolivia has announced it is to audit all energy companies operating in the country. Ten consulting firms will be appointed, at a cost of $5.2 million, to audit 56 fields operated by the eight multinational firms, as agreed under the new hydrocarbons law introduced on May 1 by president Evo Morales. Companies to have their Bolivian operations audited include Brazilian giant Petrobras, British Gas of the UK, Spain’s Repsol-YPF and France’s TotalFinaElf. The audit findings will be published in three months’ time and will be used to draw up new contracts between the state and the companies.
Court Rules Against Gutiérrez
Ecuador’s Constitutional Court (TC) has upheld a ruling handed down in June by the country’s Electoral Court to ban former president Lucio Gutiérrez from holding public office for two years. The Court voted six to three not to reverse the earlier decision, made as a result of campaign financing irregularities in 2002. The former leader had recently presented his candidacy to run for elections in October this year. Gutiérrez will not be able to appeal the ruling, according to the head of the TC.
Ecuador Expects Extra $1 Billion From Oil
Ecuador’s government has said that it expects to earn an additional $1 billion of revenues this year following the change in the hydrocarbons law affecting royalty payments and as a result of the confiscation of oil fields from US oil company Occidental Petroleum (Oxy).
New Head At LAB
Troubled Bolivian carrier Lloyd Aéreo Boliviano (LAB) has a new skipper at the helm – Franklin Taendler – elected by the unions who are running the company. Taendler, who hails from Cochabamba and has 25 years of industry experience, has his work cut out for him at LAB. Its ex-president, Ernesto Asbun, is currently on the run and facing embezzlement charges. The former state-owned company was partially privatized in 2004 and has had a colorful history since then.
Colombia Ponders 10-Year Dollar Bonds
Colombia may issue dollar-denominated bonds later this year, should market conditions improve, as part of its 2007 financing plans. The bonds are likely to have 10-year maturities or more. The spread on Colombian government US dollar debt is currently around 244 basis points above US treasuries, as measured by JP Morgan’s emerging market bond index.