BOGOTA (Reuters) - Colombia slapped a 33 percent charge on Tuesday on assets moved to tax havens, and the finance minister said “the party is over” for Colombians dodging taxes by sending funds abroad.
The charge will be applied for both individuals and businesses that move funds to any of the 44 countries on the government’s tax haven list, which includes Hong Kong, Bahrain and Antigua and Barbuda.
Colombia’s DIAN tax authority estimates the country misses out on between 15 trillion and 20 trillion pesos ($7.9 billion to $10.6 billion) in income and corporate tax revenue each year because of undeclared funds kept abroad.
That figure does not include export taxes that are lost when companies “triangulate” their exports by first shipping to tax havens and under-declaring the value of merchandise before moving it on at a higher price.
“For those who have been taking advantage of tax havens, the party is over,” said Finance Minister Mauricio Cardenas.
“It is absolutely necessary to put the brakes on this loss of resources,” he added, saying that many Colombians who avoid tax are high-earners or business owners.
He invited the countries viewed as tax havens by Bogota to sign information-sharing agreements in order to be removed from the list.
Colombia’s tax income for the first nine months of the year was 82 trillion pesos ($43.5 billion), below the target of 84.5 trillion pesos, the director of the country’s DANE statistics agency, Juan Ricardo Ortega, said separately on Tuesday, citing lower-than-expected sales tax revenue.
But full-year revenues were likely to reach between 103 trillion and 105 trillion pesos ($54.6 billion-55.7 billion), exceeding the government’s goal of 100.3 trillion pesos, he said.
Tax havens are a double-edged sword for Colombia, fostering the flow of contraband back into the country that has been bought with illicit funds that left-wing guerrillas and other illegal groups raise from drug trafficking.
As Reuters reported in May, the amount of money laundered from the trafficking of drugs, arms and human beings in Colombia is estimated by experts to be as much as $17 billion a year, more than 5 percent of the economy’s total output, and more than total foreign direct investment last year.
Additional reporting by Carlos Vargas. Editing by Peter Murphy and Andre Grenon