{"version":"1.9","identifier":"69d75dbe-d87e-4fbf-b07b-3b4e5019a232","language":"en-US","title":"Colombia's De la Espriella sends a 'rescue' bill to Congress as his own allies balk at tax rises","layout":{"columns":7,"width":1024,"margin":32,"gutter":20},"componentLayouts":{"text":{"columnStart":0,"columnSpan":7,"maximumContentWidth":720,"margin":{"top":12,"bottom":12}},"photo":{"columnStart":0,"columnSpan":7,"margin":{"top":20,"bottom":20}}},"componentTextStyles":{"default":{"fontName":"HelveticaNeue","fontSize":18,"lineHeight":29,"textColor":"#171717"},"headline":{"fontName":"HelveticaNeue-Bold","fontSize":36,"lineHeight":42,"conditional":[{"conditions":{"maxViewportWidth":480},"fontSize":28,"lineHeight":34}]},"intro":{"fontName":"HelveticaNeue","fontSize":20,"lineHeight":28,"textColor":"#555555"},"caption":{"fontName":"HelveticaNeue","fontSize":13,"lineHeight":19,"textColor":"#666666"},"byline":{"fontName":"HelveticaNeue","fontSize":13,"lineHeight":20,"textColor":"#666666"},"body":{"fontName":"HelveticaNeue","fontSize":18,"lineHeight":29,"paragraphSpacingAfter":14,"linkStyle":{"textColor":"#00704a"}}},"metadata":{"canonicalURL":"https://567politics.com/news/colombia-economic-rescue-bill-congress-fiscal-adjustment-november-2026","datePublished":"2026-11-02T20:26:12.727742Z","dateModified":"2026-11-02T20:27:50.071839Z","authors":["567 Politics staff"],"excerpt":"The plan pairs deep spending cuts with a wider sales tax and higher health contributions. Allies back the cuts but most reject the taxes.","thumbnailURL":"https://pub-fac99da959e344fe99d810d309cef7df.r2.dev/photos/article/69d75dbe-d87e-4fbf-b07b-3b4e5019a232/2bf4ab47b1996e4beff8a654ec296c6f.jpg","keywords":["co"],"generatorName":"Frog News","generatorVersion":"1.0"},"components":[{"role":"title","text":"Colombia's De la Espriella sends a 'rescue' bill to Congress as his own allies balk at tax rises","textStyle":"headline","layout":"text"},{"role":"intro","text":"The plan pairs deep spending cuts with a wider sales tax and higher health contributions. Allies back the cuts but most reject the taxes.","textStyle":"intro","layout":"text"},{"role":"byline","text":"By 567 Politics staff · Published November 2, 2026","textStyle":"byline","layout":"text"},{"role":"photo","URL":"https://pub-fac99da959e344fe99d810d309cef7df.r2.dev/photos/article/69d75dbe-d87e-4fbf-b07b-3b4e5019a232/2bf4ab47b1996e4beff8a654ec296c6f.jpg","caption":"The Capitolio Nacional in Bogotá, home of Colombia's Congress, where the Economic Rescue Law now faces committee debate. · Rikimedia, CC BY-SA 3.0 (creativecommons.org/licenses/by-sa/3.0)","accessibilityCaption":"The Capitolio Nacional in Bogotá, home of Colombia's Congress, where the Economic Rescue Law now faces committee debate.","layout":"photo"},{"role":"caption","text":"The Capitolio Nacional in Bogotá, home of Colombia's Congress, where the Economic Rescue Law now faces committee debate. · Rikimedia, CC BY-SA 3.0 (creativecommons.org/licenses/by-sa/3.0)","textStyle":"caption","layout":"text"},{"role":"body","format":"markdown","text":"Colombia's government has asked Congress to pass a large tax and spending package that it calls the Economic Rescue Law. The bill was filed in the House of Representatives on Thursday, October 29, by Finance Minister Miguel Gómez Martínez, according to the [House of Representatives' bill page](https://www.camara.gov.co/ley-rescate-economico/). It is listed as Bill 477 of 2026 and is still at the committee stage. It is not yet law.\n\nPresident Abelardo de la Espriella's government says the package is needed to avoid a debt crisis. Within days, it ran into resistance from lawmakers across the spectrum. That includes members of parties that back the president. This article explains what the bill proposes, the numbers the government uses to justify it, what each side says and the steps it must clear before Congress breaks for the year.\n\nAll quotes from Spanish-language sources in this article were translated by 567 Politics.\n\n## What the government filed\n\nThe bill's stated aim is to \"rescue the national economy.\" It would do that by cutting public spending, raising revenue, attracting investment and tightening fiscal rules, according to its official summary on the House website. The text runs to more than 100 articles. A [law firm's guide to the bill](https://www.goyenlegal.com/ley-de-rescate) counts 106, while [Noticias Caracol](https://www.noticiascaracol.com/politica/ley-de-rescate-fiscal-del-gobierno-de-abelardo-de-la-espriella-congresistas-a-favor-y-en-contra-rg10) reported 105.\n\nVice President José Manuel Restrepo presented the bill alongside Gómez. \"The previous government left us a time bomb, and that is why we are presenting the Economic Rescue Law to save Colombia from bankruptcy, from losing 360,000 jobs and from falling into recession,\" Restrepo told reporters, according to [El Tiempo](https://www.eltiempo.com/economia/sectores/gobierno-radico-ley-de-rescate-fiscal-ante-el-congreso-reacciones-puntos-clave-y-mas-noticias-del-proyecto-del-ejecutivo-de-abelardo-de-la-espriella-3597347). \"The state tightens its belt, those who have more contribute more, and those who have less will receive more.\"\n\n[Reuters reported](https://piqmarkets.com/reuters/colombia-government-proposes-steep-spending-cut-as-fiscal-woes-deepen-2026-10-29-22-54-00) that the bill aims to cut public spending by about 15 percent. The government says about 70 percent of the adjustment would come from spending restraint. The rest would come from taxes and tougher enforcement.\n\n## The numbers behind the bill\n\nThe government's case rests on its own fiscal figures. They are set out in the bill's explanatory statement, which is posted [on the House website](https://www.camara.gov.co/wp-content/uploads/2026/10/proyectos-ley/documentos/proyecto-36548/PROYECTO-DE-LEY-Rescate-Economico-2026-VSD-RADICADA-1.pdf).\n\nThe statement says the 2027 budget plan it inherited had a funding gap of 59.3 trillion pesos, or 2.8 percent of GDP. Once that gap and overestimated revenue are corrected, it says, the 2027 deficit would reach 9.4 percent of GDP. The primary deficit, which leaves out interest payments, would be 4.5 percent. The statement calls those levels \"clearly unsustainable.\"\n\nRestrepo also said one of every three pesos collected in taxes now goes to interest on the public debt, Reuters reported. In a post on the presidency's X account, the government said Colombia had received a \"fiscal time bomb,\" [Semana reported](https://www.semana.com/economia/macroeconomia/articulo/colombia-recibio-una-bomba-de-tiempo-fiscal-gobierno-justifica-ley-de-rescate-economico-y-revela-cifras-del-deficit/202649/). The government put the savings it is seeking at 44.6 trillion pesos. [El Espectador](https://www.elespectador.com/politica/se-divide-oficialismo-por-proyecto-de-rescate-fiscal-como-esta-el-ambiente-en-el-congreso/) described the expected yield as about 44 trillion pesos.\n\nSemana also cited the Autonomous Fiscal Rule Committee, an independent watchdog. It estimates the total deficit for 2026 at 7.8 percent of GDP.\n\nThe bill includes a table of how much each measure would improve the primary balance. The effect grows over time, because several of the biggest changes do not start until 2028.\n\n```chart\ntype: column\ntitle: Estimated improvement in Colombia's primary balance from the rescue bill (% of GDP)\nsource: [Ministry of Finance, Bill 477 of 2026 explanatory statement, Table 14](https://www.camara.gov.co/wp-content/uploads/2026/10/proyectos-ley/documentos/proyecto-36548/PROYECTO-DE-LEY-Rescate-Economico-2026-VSD-RADICADA-1.pdf)\nsuffix: %\nnote: Government estimates, not independent projections. \"Full strategy\" adds measures the government plans to take outside this bill.\n---\nYear | Rescue bill | Full strategy\n2027 | 2.35 | 2.39\n2028 | 3.58 | 4.29\n2029 | 3.87 | 4.59\n2030 | 4.09 | 4.73\n```\n\nThese are the government's estimates. Independent analysts have not yet published full costings of the bill. Readers can see how we treat official projections in our [methodology](https://567politics.com/methodology).\n\n## Spending cuts and state reorganization\n\nThe bill's spending side has several parts, according to El Tiempo and Semana:\n\n* **Service contracts.** Spending on service contracts, a common way the state hires workers outside the civil service, would be cut by 50 percent.\n* **Payroll.** By 2028, personnel spending in the national budget \"must decrease in nominal terms by twenty percent.\" In 2029 and 2030, it could grow by no more than 0.5 points above the inflation target.\n* **Purchasing.** State purchases would be held to inflation.\n* **Funds and transfers.** More than 250 transfer lines and about 50 public funds would be reviewed.\n* **Asset sales.** Unproductive state assets would be sold to pay down debt.\n\nThe bill would also give the president special powers for six months to reorganize the state. El Tiempo reported that he could \"eliminate, merge and split ministries and administrative departments.\" He could also do the same to agencies and other national bodies created by law.\n\nThe bill's own fiscal table shows that the \"reduction of the state\" group of measures also includes changes to social security contributions and higher consumption taxes on tobacco and alcohol. [Bloomberg Tax](https://news.bloombergtax.com/daily-tax-report-international/colombia-rescue-bill-faces-early-resistance-in-congress-3) reported that most of the adjustment comes from rising taxes and other contributions. That differs from the government's description of a mostly spending-led plan, and it depends on how those contributions are counted.\n\n## Tax changes\n\nThe tax side is where the fight has focused. The main changes, as described by El Tiempo, Semana and the law firm guide, include:\n\n* **Sales tax (IVA).** The general rate stays at 19 percent. But the reduced 5 percent rate would end in 2028, and many goods now exempt would pay the full rate. Former tax agency chief Lisandro Junco listed coffee, sugar, oils, pasta and prepaid health plans among the goods moving to 19 percent, El Tiempo reported.\n* **Sales tax refund.** A new refund, called EfectIVA, would start in 2028. The government says 19 million people would get back all the sales tax they pay, and about 16.5 million more would get up to half. El Tiempo put the average refund at 231,000 pesos a month, while Semana reported about 220,000 pesos a month per household.\n* **Personal income tax.** More middle-income earners would start paying income tax, at a new 9 percent bracket, according to Junco.\n* **Corporate tax.** The general rate would fall from 35 percent to 33 percent in 2027 and to 31 percent from 2028, the Finance Ministry said.\n* **Health contributions.** Workers' health contributions would rise in steps with income, from the current 4 percent up to 8 percent.\n* **Other levies.** The bill would raise taxes on tobacco, vaping products, alcohol and sugary drinks, extend a surcharge on the financial sector and tax online betting, Reuters and El Tiempo reported.\n\nThe health contribution change is one of the most debated items. The bill sets out the proposed rates for employees in a table.\n\n```chart\ntype: bar\ntitle: Proposed health contribution paid by employees, by monthly wage in minimum wages (%)\nsource: [Ministry of Finance, Bill 477 of 2026 explanatory statement, Table 2](https://www.camara.gov.co/wp-content/uploads/2026/10/proyectos-ley/documentos/proyecto-36548/PROYECTO-DE-LEY-Rescate-Economico-2026-VSD-RADICADA-1.pdf)\nsuffix: %\nnote: Employees now pay 4% at every wage level. Bands are multiples of the monthly minimum wage. Proposal only; not law.\n---\nWage band | Proposed rate (%)\n1 to 2 | 4.0\n2 to 4 | 5.5\n4 to 5 | 6.0\n5 to 10 | 6.5\n10 to 15 | 7.0\n15 to 20 | 7.5\n20 to 25 | 8.0\n```\n\nThe Finance Ministry argues the tax changes are progressive. It said the top 10 percent of earners would provide 97 percent of the resources raised, according to El Tiempo. Critics say the sales tax changes would hit food and farm inputs and would fall hardest on the middle class.\n\n## What the president's allies say\n\nThe sharpest early criticism came from the Democratic Center, the party of former President Álvaro Uribe, which backs the government. The Senate president, Honorio Henríquez, a member of the party, said the fiscal adjustment was needed but should not reach people's pockets. \"Colombians can't bear one more tax, much less in the Caribbean region,\" he said, according to El Espectador.\n\nSenator Andrés Forero said he would support cuts to public spending and the merging of agencies. \"But Colombians can't bear more taxes and I cannot support almost all of the tax provisions,\" he said, according to El Tiempo. Senator María Clara Posada said the bill \"puts its hand in families' pockets shamelessly\" and said she would vote against it. Party director Gabriel Vallejo said Colombians \"expect a reduction or even elimination of taxes, not that they be raised or new ones created.\"\n\nUribe himself called for a \"calm analysis\" before taking a position, Noticias Caracol reported. He told Blu Radio that he had spoken with De la Espriella. \"This party has a principle called fewer taxes,\" he said.\n\nEven the National Salvation party, the party closest to the president, split. Senator Sara Castellanos said her party would not support sales tax on fruit, vegetables and grains, more taxes on the middle class, or sales tax on farm inputs, El Espectador reported. She praised the cuts to payroll and contractors and the stricter fiscal rule. Party director Enrique Gómez backed the full text. He said the inherited debt \"swallows 1 of every 3 pesos\" of national revenue, according to Noticias Caracol.\n\nCambio Radical's Julio César Triana said his party backs the austerity measures but would propose changes to the sales tax on basic foods and the higher health contributions. Efraín Cepeda, head of the Conservative caucus, said his party would study the sales tax changes closely, El Espectador reported. El Espectador concluded that, for now, the votes in the Senate would run against the government, though the text is likely to change.\n\n## What the opposition says\n\nThe left-wing Historic Pact, the party of former President Gustavo Petro, now in opposition, rejected the bill. Party director Gabriel Becerra called it \"a blow to the pockets of working families and the middle class,\" according to [La Razón](https://larazon.co/no-provoquen-al-pueblo-oposicion-arremete-contra-el-iva-a-los-alimentos-de-la-ley-de-rescate/). He said it shifts the fiscal crisis onto the majority \"while easing the obligations of the most powerful,\" Noticias Caracol reported.\n\nSenator David Racero, who sits on the economic committees, compared the food tax changes to a 2021 tax reform under President Iván Duque that sparked mass protests. \"It took less than this to start the social uprising. So don't provoke the people,\" he said, according to La Razón. Racero said one article would remove 107 products from the list of goods exempt from sales tax.\n\nGreen Alliance Senator Ariel Ávila said the bill seeks \"to lower taxes on the very rich and raise them on the poor and the middle class.\" He pointed to the cut in the corporate rate. Historic Pact Senator Alejandro Ocampo warned that the reorganization powers could leave \"700,000 people without jobs,\" Noticias Caracol reported. 567 Politics has not been able to verify that estimate.\n\nRestrepo and the government have placed the blame for the deficit on the Petro government. The Historic Pact disputes that framing. Each claim is a political argument.\n\n## What economists and other lawmakers say\n\nSome economists welcomed the bill while warning of a tough debate. Former Finance Minister Mauricio Cárdenas called it \"a necessary step to face the crisis in public finances,\" El Tiempo reported. \"Surely there will be aspects that will cause controversy and not everyone will agree,\" he said. \"But as a whole, the idea of cutting spending and seeking to improve tax collection is an idea that deserves support.\"\n\nLuis Fernando Mejía, a former director of the think tank Fedesarrollo, said the bill proposes a very large fiscal adjustment, close to 4 percent of GDP by 2030. He said it raises structural questions, including the reorganization of the state, earmarked revenue and a wider sales tax base. \"What is at stake is nothing less than the sustainability of public finances,\" he said, according to El Tiempo.\n\nRepresentative Catherine Juvinao said the bill included ideas she had backed, such as a 19 percent sales tax on online gambling. But she called the move to tax fruit, vegetables and internet service for low-income households \"excessively harsh,\" El Tiempo reported.\n\n## How the bill moves through Congress\n\nThe bill must pass four debates, in the economic committees and on the floors of both the House and the Senate. Any differences must then be reconciled before the president can sign it. The regular session ends on December 16, El Tiempo reported.\n\nTiming matters for taxes. According to the law firm guide, the income tax changes would apply to the 2027 tax year only if the law is enacted before January 1, 2027. The new sales tax rules and the EfectIVA refund would start on January 1, 2028.\n\nThe guide also notes a precedent. The previous government's financing bills in 2024 and 2025 both died in the economic committees in December. Those defeats came under a different government and a different Congress.\n\nThe government will manage the bill with a new Interior Minister, Alejandro Ordóñez, El Espectador reported.\n\n## The wider picture\n\nColombia is not the only country fighting over how to close a budget gap this autumn. In France, the National Assembly is set to [vote on its 2027 budget revenue plan](https://567politics.com/news/france-assembly-budget-2027-revenue-vote-november-3-lescure-49-3-november-2026) after weeks of debate. In Japan, the government is pushing [a cut to the consumption tax on food](https://567politics.com/news/japan-consumption-tax-cut-bill-diet-takaichi-october-2026), the opposite of Colombia's proposal. Elsewhere in South America, Brazil's politics remain unsettled [after its presidential runoff](https://567politics.com/news/brazil-flavio-bolsonaro-leaves-after-runoff-october-2026).\n\nIn Colombia, the debate turns on a basic choice. The government says the country must cut spending and raise revenue now to avoid a debt crisis. Its allies largely accept the spending cuts but reject most of the new taxes. The opposition says the plan shifts the burden onto working families while cutting taxes for companies. The committees will decide which parts survive.\n\n## What to watch\n\n* **Committee reports.** The economic committees must name rapporteurs and publish reports before the first vote.\n* **Coalition talks.** The government needs votes from the Democratic Center, which so far opposes most of the tax measures.\n* **Sales tax on food.** This is the most likely item to change, based on the objections from allies and opposition alike.\n* **The December 16 deadline.** Missing it would push the income tax changes back a year, according to the law firm guide.\n\nThis report follows our [editorial standards](https://567politics.com/editorial-standards). Figures are the government's unless stated otherwise.","textStyle":"body","layout":"text"}]}