Some Aspects of the General Budget of Colombia for the year 2.025.

The General Budget of the Nation (PGN) for the year 2.025 presented by the government to Congress for discussion and subsequent approval has a value of $523 billion (b) higher than that of the year 2.024.

The PGN must have the same value in income and expenses, so in this case according to the instructions of the PGN of 2.025 to the income that totals $511 b, $12 b are added from a Financing Law that is proposed for approval also by Congress to total $523 b, a sum that is equal to the value of expenses.

In effect, they are equal totals where on the income side the components are the tax components for $305 b, the credit components for $156 b and others for $62 b. The expenses include operating expenses for $328 billion, debt service for $113 billion and investment expenses for $82 billion. Thus, the main income item is tax revenue, and the main expense item is operating expenses, and their comparative levels are not very different.

From the above composition, it can be observed that, as an arithmetic exercise, operating expenses are paid with tax revenue, debt service is paid with credit revenue and the surplus of this, when added to the income contained in “others”, pays investment expenses. This exercise can be done due to the numerical similarity between the component items of income and expenses, but in practice this does not happen exactly due to the dynamics between income and expenses.

What was intended to be shown is the relative size of the debt (or credit) on both sides, both in income and expenses of the PGN and the mechanism that operates in its registration, since on the income side, getting into debt consists of taking out loans and on the expense side it is about paying the debt service and on the income side the debt increases and on the expense side resources are committed to pay the debt.

In this case of the 2.025 PGN, the income from credits covers all the payments for debt service and there is a surplus of 38%. Again, it is only an arithmetic exercise between components of the PGN, but it also shows in this case that the credits for indebtedness exceed the debt payments with the consequent net effect of debt accumulation.

This exercise also sought to show that income from taxes covers the majority, 93% of operating expenses, and that other income grouped under "others" allows for the payment of 76% of investment expenses.

With respect to the previous breakdown of income and expenses of the PGN, the components of operating expenses and tax income are presented below, which, as mentioned before, reach a value of $328 billion and $305 billion respectively. The former, or operating expenses, represent 63% of total expenses and include personnel expenses of $60 billion, acquisition of goods and services of $15 billion, and current transfers of $252 billion. The latter are the resources that go (along with investment) to public social works in education, health, defense, housing, and pensions.

As for tax revenues, which represent 58% of the total, there are internal tax collections such as income, VAT and wealth tax for $267 billion and external taxes such as tariffs for $38 billion.

Therefore, by making a simplified observation of the components of these last two items, it can be inferred that an increase in tax revenues should lead to an increase in operating expenses and therefore to greater economic and social development.

Finally, the 2.025 PGN compared to that of 2.024 allows us to observe that operating expenses rise from 61.4% to 62.7% of the total, debt service rises from 18.8% to 21.5% and investment falls from 19.8% to 15.8%. The official explanation is that to service the debt, which grew by more than 2 percentage points from one year to the next, it was necessary to reduce the resources for investment, while operating expenses did grow to serve public services in education mainly, although also for health and defense.

In addition, investment was also the expenditure component that was chosen to be reduced since, according to the explanatory statement of the 2.025 PGN, it had already been necessary to include the approval of a financing law for $12 billion so that with these resources the total expenses of $523 billion would be balanced on the income side. It is noted in the presentation of the PGN that in the event of not approving said law, total expenditure will have to be cut.