Lawmakers reject Colombia government’s 2025 budget proposal Reuters

By Nelson Bocanegra and Carlos Vargas

BOGOTA (Reuters) – The Colombian Senate’s economic committee scrapped the government’s proposed 2025 budget on Wednesday, arguing that the Andean country would not be able to raise the proposed amount amid lower-than-expected tax collections.

In late July, Colombia’s finance ministry presented Congress with a budget proposal for next year worth 523 trillion pesos ($122 billion).

The budget was rejected even after the finance ministry presented a new tax reform proposal to lawmakers on Tuesday to raise an additional 12 trillion pesos ($2.8 billion), which the government says will finance the budget.

But most MPs on both the Senate and House of Commons economic committees, which weighed the bill jointly on Wednesday, said the government’s efforts to raise more funds, including plans to tackle evasion and evasion, they are not realistic.

“We cannot approve an unfunded proposal, the result of President (Gustavo) Petro’s irresponsibility,” said Senator Carlos Abraham Jimenez, from the right-wing Radical Change party.

Petro said Tuesday he would set the budget by decree if Congress rejects it.

“The country needs seriousness, justification and certain sources when it comes to approving budgets with values ​​like the one presented today, otherwise we have to reject it,” said Senate President Efrain Cepada, of the Conservative Party. “This is not personal, it is the minimum required in congress.”

The Senate Economic Committee rejected the budget amount by 12 votes to one, after which a House committee vote was not needed.

Last June, the Finance Ministry was forced to freeze about $4.6 billion in spending due to a sharp drop in tax revenues, leading to an increase in the fiscal deficit target for 2024 to 5.6 percent , from 5.3% previously.

An independent committee overseeing the country’s compliance with the so-called fiscal rule – intended to stop the deterioration of public finances – said in July that adjustments were needed to ensure compliance in 2024 and 2025 because of possible risks to tax collection.

($1 = 4,285.61 Colombian pesos)