LatinNews Daily - 10 December 2025

*A senate commission in Colombia has rejected a tax reform bill submitted by President Gustavo Petro’s government, casting doubt over the government’s spending plans in the final months before the presidential election in May 2026. The senate’s fourth commission voted yesterday to archive the bill, with nine votes against the legislation and four in favour. The reform bill, which was submitted on 1 September, had originally sought to raise Col$26.3tn (US$6.8bn) to fund the government’s 2026 budget proposal. However, during negotiations with the congressional economic commissions in late November, Finance Minister Germán Ávila Plazas agreed to modify the tax bill so that it would instead seek to raise Col$16.3tn, eliminating articles including a tax on church activities and a hike in value-added tax (VAT) for fuel and cloud services. Centrist and conservative lawmakers in the senate commission argued that the government should be cutting spending instead of raising taxes. Their rejection of the tax reform bill leaves the government unable to fully fund the Col$546tn budget for 2026 which was approved by congress in October, raising the prospect of either spending cuts or increased borrowing.

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