Results and Goals of Tax Collections in Colombia. Some observations.

In recent years there has been greater emphasis by official authorities on showing tax collections with respect to their proposed goals. This note will briefly examine this issue for recent years, which includes the recession due to the pandemic and its subsequent reactivation.

The collection of national taxes according to recent information from official sources for the year 2.021 was $173.7 billion (b) higher than the previous year of $146.2 b and the goal set of $164 b. However, the increase ($27.5 b) is due in part to the fact that it corresponds to a year of economic rebound compared to the previous year, which was a recession with the consequent drop in collection. With respect to the goal, it was higher by $9.7 b.

In fact, this fall in the collection mentioned in 2.020 went from $157.4b in 2.019 to $146.2 b, it fell $11.2 b and even more, the collection was only slightly higher than the year 2.018 of $144.3b it mean that , the country fell back in almost two years in collection levels as a result of the pandemic and the recession.

The economic rebound of 2.021 made it possible to recover the collection levels that fell in 2.020 and advance over those obtained in 2.019, the year before the pandemic, exceeding them by $16 b. But with respect to the official goal established on a date prior to the onset of the pandemic of $167.5 b for the year 2.020, the result for 2.021 is only $6.2 b higher. The latter variation that would have been obtained (or a close one) if the pandemic had not occurred in 2.020.

In turn, the official goal for the year 2.021, unlike usual, was not higher than that pre-pandemic goal for the year 2.020, as explained below. Indeed, with all logic, what was done once the recession of 2.020 advanced was to lower the goal for that year from $167.5 b to $144.2 b, for which the collection at the end of the year met the new goal by reaching $146.2 b. Based on these results for the following year in 2.021, the goal was established at $164 b, but it is lower than the $167.5 b of the initial goal (for a year before) of 2.020, partially ignoring the post-quarantine reactivation or rebound as an economic fact of 2.021.

Therefore, the goal has had to be readjusted above the one initially established for the year 2.020 and not below it, as was done. Thus, a more realistic goal for 2.021 set at $170 b of collection, higher by $6b than the established one, would lead to compliance with the collection above the goal of $3.7b and not $9.7b as it appears registered.

One final observation. National taxes include mainly withholding at the source of income, VAT and customs in their order, the three represent more than 70% of the total and the first two exceed 50%, which is a reflection of the modifications to the levels or in coverage that have been significant instruments in the total collection of taxes. Other taxes such as wealth tax, 4 per 1,000 and gasoline add up to 7% of the total collection. The latter would still have to be replaced by more of the former if they were eliminated in order to avoid a reduction in the total collection, which would affect the fiscal accounts. These are issues to be addressed in a tax reform in the next presidential term.

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Today (monday 17) as for the world markets, the stock markets in Europe grow in anticipation of results in corporate profits and increases in interest rates. In the United States they are closed for holidays.

The price of oil remains high due to lower world supply, lower inventories in the United States and uncertainty about the ability to meet world demand due to the economic recovery. The WTI and the BRENT register 83.8 and 85.9 dollars per barrel respectively.

In Colombia, the stock market grows 5% due to the demand for shares of companies such as Suramericana, Argos and Nutresa. The peso is not trading today against the dollar due to the close in the North American country and today registers 3.994 per dollar corresponding to the TRM.