July 30, 2020 / 9:48 PM / 9 days ago

UPDATE 1-EXCLUSIVE-Colombia to collect more 2020 tax than previously thought, official says

(Adds comment on tax reform, figures on predicted fiscal deficit)

By Nelson Bocanegra

BOGOTA, July 30 (Reuters) - Colombia’s government will collect 7.5 trillion pesos ($2.01 billion) more in taxes this year than previously predicted amid the coronavirus pandemic, due to improved efforts to combat evasion, the head of the tax and customs agency told Reuters on Thursday.

The government reduced its collection target in June to 144.2 trillion pesos, some $38.8 billion, from an original target of 167.5 trillion. But Jose Andres Romero, the head of the DIAN tax and customs agency, told Reuters in an interview collection will likely reach 159.9 trillion pesos.

Should that projection come true, the decline in tax collections will be almost a third smaller than thought.

A months-long nationwide quarantine in Latin America’s fourth-largest economy has led the government to take on billions more in debt and predict economic contraction of 5.5% for 2020.

Tax collection fell by 6.4 trillion pesos between April and May, but in June the government collected 1.83 trillion pesos more than expected. A similar above-target collection is expected in July, Romero said.

“There will be seven and a half trillion (pesos) more in collection (in 2020) than what was planned,” Romero said in a video interview.

The DIAN recovered 8.7 trillion pesos ($2.34 billion) in anti-tax evasion efforts between January and July, more than half its full-year goal.

“I think if the Colombian economy reactivates more rapidly ... that people, despite the situation, despite the pandemic, will take self-care measures to restart their economic activities,” Romero said. “That will without a doubt help collection to improve much more quickly.”

Depending on the speed of recovery, the country could collect 157 trillion pesos in taxes next year, he said, adding a tax reform will likely be put to congress in 2021.

More taxes now would not be “well-received”, he said.

The government has estimated that the fiscal deficit will be -8.2% this year, shrinking to -5.1% next.

$1 = 3,716.89 Colombian pesos Reporting by Nelson Bocanegra Writing by Julia Symmes Cobb Editing by Nick Zieminski and Alistair Bell

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