US embassy cable - 04BOGOTA11209

UNCLAS BOGOTA 011209 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN 
SUBJECT: TAX REFORMS IN COLOMBIA 
 
 
1. (SBU) SUMMARY. Ambassador Wood met with Colombian Minister 
of Finance Alberto Carrasquilla to discuss tax reforms in 
Colombia.   The Ambassador offered U.S. Embassy assistance to 
help move tax reforms forward.  Minister Carrasquilla was 
receptive to the offer and agreed that reforms were needed; 
however, he expressed surprise over private sector interest 
in reform The Embassy has encountered. 
 
2.  (SBU) During an October 25 meeting, Ambassador Wood 
pointed out to Carrasquilla that a strong fiscal situation is 
fundamental to Colombia,s continued growth.  The Ambassador 
stressed the need for meaningful reform to the tax system as 
a key element in improving Colombia,s fiscal health.  The 
Ambassador also noted private sector concerns over the 
perception that large businesses are paying more taxes than 
smaller firms.  Carrasquilla thanked Ambassador Wood for his 
comments, and expressed interest in working with the U.S. 
Government on this issue. 
 
3.  (SBU) The Ambassador offered Embassy assistance to help 
in developing support for a reform package.  The Ambassador 
told Carrasquilla that a possible first step could be for the 
US Embassy to invite The Minister and private sector to 
exchange ideas and define reform goals.  Once the GOC and the 
private sector define common ground on these issues, the 
Ambassador told Carrasquilla that it will strengthen 
President Uribe's position before Congress. 
 
4.  (SBU) Carrasquilla admitted that of those that can pay 
taxes only a small percentage do, and offered that private 
sector interest would greatly influence the Congress. 
However, he noted that there is a short time frame in which 
Congress will be willing to tackle legislation resulting in 
major fiscal reform.  Emboffs noted that 2006 (right after 
the next presidential elections) would be the best time to 
present such a package.  This would provide sufficient time 
to develop proposals with broad public support. Carrasquilla 
noted that communication between stakeholders was the key to 
passing reforms.  The DCM and Carrasquilla agreed to keep in 
contact on this issue and to move forward with increased 
dialogue. 
WOOD