Key facts · updated Sunday, Nov. 1, 2026
- What it is: the “Economic Rescue Law,” a tax bill filed in Colombia’s House on Oct. 29, 2026 by President Abelardo De la Espriella’s government. Congress must approve it; it can change.
- Corporate income tax: cut from 35% to 33% in 2027 and 31% from 2028.
- Banks and large insurers keep a 5-point surtax: 38% in 2027, 36% in 2028–2030.
- VAT: the 5% reduced rate disappears from 2028; coffee, sugar, oils, pasta, canned goods, chocolate and liquor move to 19%, with VAT refunds for about 19 million low-income Colombians.
- Spending: a 2.2% cut in public spending.
Colombia’s new government has put a sweeping tax reform before Congress. For consumers, the headline is a 19% VAT on many processed foods. For investors in Ecopetrol (EC), Grupo Cibest/Bancolombia (CIB) or the COLO ETF, the more important line is a corporate tax cut to 31%, paired with spending cuts that, if delivered, could ease Colombia’s fiscal worries. Here is what is in the bill and how it could move Colombian stocks and the peso.
What the bill would change
| Measure | Proposal | From |
|---|---|---|
| Corporate income tax | 35% → 33% (2027) → 31% (2028+) | 2027 |
| Financial-sector surtax | Kept: 38% (2027), 36% (2028–2030) for large banks and insurers | 2027 |
| VAT on processed foods, liquor | 5% → 19% (coffee, sugar, oils, pasta, canned goods, chocolate, sauces, cured meats, liquor) | 2028 |
| VAT refunds (EfectIVA) | 100% for households in poverty; 30%–50% for other vulnerable households | 2028 |
| Personal income tax | 0% bracket threshold lowered from 1,090 to 720 UVT | 2027 |
| Wealth tax | For net worth from 95,500 UVT | 2027–2030 |
| Dividends | Unchanged for Colombian residents; an 8% rate proposed for certain non-resident dividends | — |
| Public spending | Cut by 2.2% | — |
Source: bill summary reported by Portafolio and Valora Analitik. Terms may change in Congress.
The charts and screeners behind our market coverage. Create a free account; if you later choose a paid plan you get a $15 discount.
Open TradingView → · Affiliate linkWhat it could mean for Colombian stocks
- Earnings tailwind: on $1 of pre-tax profit, a 31% rate leaves 69 cents vs. 65 cents at 35%, roughly 6% more net income, which supports dividends. Utilities and industrials such as ISA, GEB, Celsia and the Argos group are the most direct beneficiaries.
- Banks benefit less: CIB and other large lenders keep the surtax, so their effective rate stays higher. CIB dividend per ADR →
- Ecopetrol (EC): a lower corporate rate helps, but changes to the carbon tax and, above all, oil prices matter more. EC dividend 2026 →
- Consumer names face weaker demand when VAT rises in 2028.
The bigger prize: the fiscal story
Colombian 10-year bonds yield about 13%, among the highest in emerging markets, largely because of fiscal concerns. A credible mix of spending cuts and new revenue could narrow the deficit, pull yields down and support both stocks and the peso. If Congress waters it down, that premium may persist. The central bank’s split decision to hold at 12.25% on Oct. 30 adds to the uncertainty for the peso. Why the peso moves →
Fundamentals, charts, valuation and side-by-side comparisons of stocks, ETFs and funds worldwide, including Colombian ADRs. There is a free plan to start.
Try Koyfin → · Affiliate linkWhat it means for U.S. investors
- EC, CIB and COLO could react to each step in Congress; expect headline-driven volatility over the coming months.
- Dividend outlook: lower corporate taxes from 2027 could lift payouts approved in 2028 and beyond.
- Living in Colombia: groceries with processed foods and imported liquor would cost more from 2028; residents with significant assets should watch the wealth-tax thresholds. Colombia tax guide for expats →
Daily coverage: Colombia stock market today · COLO explained.
Frequently asked questions
What is Colombia’s Economic Rescue Law?
A tax and spending bill filed in Colombia’s House of Representatives on Oct. 29, 2026 by President Abelardo De la Espriella’s government. It cuts the corporate tax rate, raises VAT on many processed foods to 19% from 2028 and cuts public spending by 2.2%.
Does Colombia’s tax bill cut corporate taxes?
Yes, as proposed: from 35% to 33% in 2027 and 31% from 2028. Large banks and insurers keep a 5-point surtax.
How could it affect Ecopetrol and Bancolombia stock?
A lower corporate rate supports earnings and dividends; banks benefit less because of the surtax. Market reaction will depend on what Congress approves.
When would the 19% VAT take effect?
From Jan. 1, 2028, if the bill passes.
Information only, based on the filed bill and press reports; not tax or investment advice.
Affiliate disclosure: some links on this page are affiliate links. If you sign up or subscribe through them, Bolsa al Día may earn a commission at no extra cost to you. This never affects our analysis. Learn more.
Leave a Reply