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Petrol tax: this is how help for high earners and big pensions is reduced – Personal Finance – Economy

Petrol tax: this is how help for high earners and big pensions is reduced – Personal Finance – Economy

With the government’s decision to Gustavo Petroto make a hard cut in the tax reform with the benefits enjoyed by people with higher incomes when they receive exempt income (exemptions) and deductions, the level of which is 25 percent but in practice it is possible to reach 35 or 40 percent, it is estimated that a significant amount of resources of them, which contributes to the goal of 5.45 billion pesos of annual collection from the income tax of natural persons.

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In this way, according to the bill submitted by the Minister of Finance, José Antonio Ocampo, to Congress, 25 percent of the total value of the labor incomebut the limit on that benefit will now be only 790 units of tax value (UVT) per year, equivalent to just over 30 million current pesos according to the value of this unit for 2022.

The difference compared to the current limit will be quite large, since today, according to the Tax Statute, this benefit is 240 UVT per month, that is, 2,880 UVT per year, equivalent to a little over 109 million pesos in 2022.

(Also read: This is how much you would have to pay in taxes if you make more than $10 million)

According to the experts consulted and as explained by the director of the Intensive, Luis Carlos Reyes, this means that those who enjoy these high incomes are exempt today for saving in accounts to promote construction to purchase housing (AFC), voluntary pensions. and housing interest payments, which they have access to because they have a high income, they will lose the benefits that today allow them to significantly reduce the amount they have to pay.

So, for example, if a person has an annual income of 500 million pesos (41.6 million pesos every month), his exempt income limit will be equal to 30 million pesos (for the year 2022), and the difference, that is, 79 million pesos, to be added to the tax base on which the income tax is determined.

File a 2022 tax amendment

The Minister of Finance (signing), José Antonio Ocampo, during the filing of the tax reform project that goes for an initial collection of 25 billion pesos.


Cesar Melgarejo. OUT

In other words, in the case of this example, the final exempt income would no longer be equal to 25 percent, but would drop to 21.8 percent. With this, the practical effect is that those who receive the most money each month will increase their contribution, that is, their effective tax rate, to the same rate as the income tax tables, but those benefits removal

“The nominal limits of the automatic exempt income for labor income of 2,880 UVT and 5,040 UVT in the case of the total exempt income and deductions of the general card are very large,” shows part of the explanatory statement of the project ‘Tax reform for equality and the social justice’.

The director of the Dian, Luis Carlos Reyes, explains that if a person earns 11 million pesos per month, he will keep the exempt income he had for the first 10 million pesos, but on the additional million he will pay for those benefits.

The case of pensioners with more than $10 million

According to the bill, it is necessary to establish measures that can contribute to the equity of the income tax levied on pensioners, based on greater social and tax justice.

In the presentation of the project, the Government assured that any pensioner who receives an allowance of 10 million pesos or less, except for this concept, will not pay income tax, and only 0.2 percent of pensioners will enter to contribute do .

According to the text filed in Congress, in the case of retirees, it is intended to lower pension-free income from 500 million to 75 million pesos, that is, from 12,000 UVT to 1,790 UVT per year, a figure that is the first of all. it gives a sum of 68 million, that is, 5.6 million pesos per month.

But the director of Dian, Luis Carlos Reyes, explains that when the exempt income ends and the rest of that income is taxed, the first 1,090 UVT of the person’s income is taxed at a zero rate while they this 5 .6 million These 1,090 UVT are added at zero rate, which is not exempt income but taxed without rate, and then spends the 10 million pesos.

The project shows that, although the pension and the value of the pension allowance are constitutionally protected, taxing this type of income when a certain amount is exceeded corresponds to the existence of an independent legal relationship.

“This is a mandatory tax-type relationship that the legislator is responsible for creating and configuring, which must respond to the principles of equity, justice, progressivity and efficiency. In this sense, the tax legislator would not be modifying the amount of the pension allowance, but would create a different tax obligation relationship”, explains the Government in the explanatory memorandum.

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