Colombia cuts corporate tax to 31%, expands VAT base to avert recession

Colombia's government proposes lowering corporate income tax from 35% to 31% and extending 19% VAT to coffee, sugar, wine, cell phones, computers, tablets, and agricultural inputs starting 2028. The fiscal package aims to stimulate growth and avoid recession, but the VAT expansion may face political resistance and could dampen consumption. The net market impact is ambiguous: lower corporate taxes are growth-positive, while broader VAT is mildly contractionary.

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