Colombia Tourism Could Get Pinched Under Fiscal Reforms by New President
Photo Credit: Tourist attractions like Centro de Medellín y Plaza Botero could feel the pinch from new fiscal reforms being proposed. VisualHunt / Museo de Antioquia
Skift Take
Colombia’s tourism sector has had a remarkable recovery and expects real growth by the end of the year. But a tax reform being led by President Gustavo Petro could prompt a slowdown, raising fears for hotel projects.
When Colombia’s new president, Gustavo Petro, took office in August, it seemed a new era for the country’s tourism industry could begin. If anything, Petro’s team and campaign had made sustainability and inclusivity one of their trademarks, and there was a large role for the sector to play.
However, the most urgent item in Petro’s plan was restoring the country’s finances, to face rising inequality and poverty issues. So about a day into his presidency, he presented a fiscal reform with the goal of increasing tax collections by $11 billion between now and 2026, the last year of his term.
Among the proposed measures, a huge red flag was the elimination of the 19 percent value-added tax exemption on plane tickets and travel packages. Also, hotel and rooms construction and remodeling had been enjoying a differential tax rate that was 9 percent below average, a rate that was bound to be eliminated.
During the last two months, legisl
