At the beginning of the year, Colombia implemented a controversial tax reform that includes an increase in the national sales tax and other provisions in order to replace lost revenue from the country’s chief export, oil. The reforms, which also reduce the overall corporate tax burden, are expected to raise an additional $2 billion for the government this year, and officials hope it will reduce the risk of downgrades to Colombia’s credit rating. What effects will the tax reform have on Colombia’s economy and on businesses operating there? Which business sectors are best positioned to benefit from the changes, and which may be harmed by it? To what extent does the reform fail to tackle tax evasion, as Colombia’s chief prosecutor, Néstor Humberto Martínez, has argued?
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