With the program ‘Works for Taxes’ implemmented by the Government, enterprises help to close the socioeconomic gap, fight poverty and marginality in places of their interest or influence
By: María Claudia Lacouture, AmCham Colombia Executive Director.
Taxes are satanized because everyone thinks that they get lost in the labyrinths of power without complying what they were created for. It is often read or heard that the ideal scenario would be that each person could have the chance to choose how and where to place their tributes. Nowadays, entrepreneurs have that chance, and in addition, in the face of the historic juncture of contributing to a long-lasting peace for Colombia.
With the program ‘Works for Taxes’ implemmented by the Government, enterprises help to close the socioeconomic gap, fight poverty and marginality in places of their interest or influence, in places in need where the armed conflict affected the population and stopped growth, in places where it´s necessary to invest in order to avoid that its population becomes vulnerable to other factors of illegality and violence.
We learned it from Perú where this program, ‘Works for Taxes’, has been working for seven years. Last year, 76 projects were awarded, mainly in education, most of them to mining companies which, in this way, they also compensate their influence zones.
Road infrastructure, aqueduct and sewer systems, energy, healthcare and education are the main sectors out of the 647 projects registered in the Territory Renewal Agency of Colombia (ART) to be developed, and that in order to be launched must be validated with the respective Ministries and the National Planning Department.
The benefited projects must be located in the so called ‘Most Affected Zones by the Armed Conflict’ (Zomac) that the National Government identified, and which include 344 rural towns.
The Zomac initiative also includes tax exemptions to investment projects in the sectors of agroindustry, commerce, transport services, construction, real estate activities, tourism, education, healthcare, garages, dealers, telecommunication.
For these cases the main benefit consists in a progressive rate for the income tax during a 10-year period as of 2017, which varies depending on the company’s size. For micro and small enterprises the fee is of 0% from 2017 to 2021, 25% from 2022 to 2024, 50% from 2025 to 2027 and from 2027 on, they must pay 100% of the fee.
Companies must comply with different regulations, but nothing that a company can´t do, even the small ones. What these rural towns really need is that their authorities and the private sector know very well what the Zomacs are about, the possibilities they have, what can they do to encourage them, and look for investors in the region, the country, and even abroad, because the decree works for small commercial businesses as well as for large infrastructure projects, although mining companies are excluded.
However, as it has happened before with several good initiatives, this chance can be wasted by lack of disclosure, promotion and management. That’s why it is so important for every Colombian to support within their grasp the knowledge of this initiative and its promotion.
AmCham Colombia is committed to do so, and for that purpose, we carried out a survey with the companies. At the moment we have two good news and a bad one: The good ones are that the companies are interested in investing in sustainability projects and that there is a great interest in joining forces with other companies to work in specific projects. Bad news is that the lack of knowledge about the program is generalized.