BOGOTA, Feb 9 (Reuters) - Colombia's government has eliminated a tax paid on local portfolio investments by Peruvian and Chilean pension funds, and may add Mexico, a government official said on Thursday.
The measure - intended to bolster market integration from Pacific Alliance nations - was included in the new tax reform that came into force in January, but had yet been announced to the market, David Salamanca, director of financial regulation at the Ministry Of Finance, told Reuters.
"Today, Chile and Peru have such agreements and have been applying them since January 1, 2017. In the case of Mexico, another country in the alliance, the issue is being reviewed," he said.
The remainder of foreign investors will continue to pay a 14 percent tax on local portfolio investment.
Finance Minister Mauricio Cardenas has said he wants to create better integration among trade partners in the alliance and bigger competition among investors.
The Pacific Alliance includes Colombia, Peru, Chile and Mexico.
"What we want is to attract pension funds from countries like Peru, which has more resources than investment opportunities, to come and invest in Colombia so that there is more competition among institutional investors," he said.
The announcement comes as foreign funds have slowed the pace of investment in Colombia's domestic public debt. Still, overseas investors are the second largest holders of local debt, with 58 trillion pesos ($20.2 billion) at the end of January. (Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Helen Murphy; Editing by Bernard Orr)