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Colombia Congress Open to Discuss Lower Bond Tax, Lawmaker Says

Dec. 13 (Bloomberg) -- Colombian lawmakers remain open to discussing a bill that will cut the tax rate on foreigner’s bond profits, even after they changed the original proposal, said Angel Custodio, a member of the Lower House.

The bill as it currently stands would reduce the tax to 25 percent from 33 percent, above the 14 percent originally proposed by President Juan Manuel Santos’s administration.

Lawmakers raised the proposed levy on concern increased inflows would fuel gains in the peso and following requests for lower income taxes and higher taxes on capital, said Custodio, who proposed the change to 25 percent.

“We’ll look to see if a change is made,” said Custodio. “You want to balance investments to compete with the world.”

Colombia is looking to reduce yields in the $83 billion local debt market by attracting more foreign investors with the proposed tax cut, Public Credit Director Maria Fernanda Suarez said in an interview last month. Bonds plunged Dec. 11 after lawmakers scaled back the government’s tax-reduction proposal.

The yield on Colombia’s 10 percent debt due in July 2024 fell three basis points, or 0.03 percentage point, to 5.98 percent at 10:20 a.m. in Bogota, according to the country’s central bank. The bond’s price rose 0.273 centavo to 132.895 centavo per peso.

To contact the reporters on this story: Oscar Medina in Bogota at omedinacruz@bloomberg.net; Andrea Jaramillo at ajaramillo1@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.

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