President Gustavo Petro’s tax reform is on its way. There are many points that he proposes to touch, with the aim of creating new taxes that allow financing government plans, while responding to campaign promises. However, there are also many potential problems that have entrepreneurs in Colombia thinking, especially those in the technology sector.
Speaking of this, and within the framework of Andicom 2022 that is being held this week in Cartagena de Indias, this week Alexander Torrenegra, Colombian entrepreneur, founder of Voice123, Bunny Studio, Torrenegra Accelerator and Tribe; in company of Freddy VegaFounder and CEO of Platzi, sat down to talk about some of the most controversial points of the government proposal.
The main topic of conversation was the proposal for a tax that considers intrinsic heritage. In a very simple and summarized way, for entrepreneurs like Vega or Torrenegra it means that a company that they create in the country will also begin to pay taxes based on, for example, the valuation they have within the market. The problem is that these valuations do not usually reflect the real capital of a company. A company valued at one billion pesos does not have that money in capital, but it is the value that the market gives to the company. “What needs to be appraised is silver. Not the theory that there is money,” Vega assured.
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For technology companies, the language of applying taxes to intrinsic wealth. “Sometimes it will be impossible to undertake. Especially for technology companies that tend to have explosive valuations.”
The conversation also made it clear that the reform was not bad, but it did consider that its vision of ‘taxing the rich’ is different from ‘taxing those who are not paying enough’, something that for both entrepreneurs is different. Vega, for example, highlighted how the reform does not make sense in the sense that it will not end up having the effect that the Government hopes for (raising money), considering that people with the capital to be able to move to other countries where they can Avoid this type of recording. The problem, as mentioned several times, is not paying taxes, but rather the people from whom these resources could be obtained, while middle-class entrepreneurs end up affected and unable to create a company.
“I do not believe that this government has built this reform with the aim of ‘scrubbing’ the enterprises. What I do believe is that this government has a tunnel vision to increase taxes on companies that have generated large profits and have enormous assets”, was one of the conclusions of the conversation between both businessmen.
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“If a tax reform shits the rich, then what happens is that those people leave the country, stop paying those taxes and then the reform affects others. The problem is that many of these people come from families that offer them dual citizenship or the possibility of emigrating without major problems”.
Torrenegra and Vega’s proposal is that a tax reform should attack the people, organizations and entities that today are not paying enough taxes, but avoid the light language in which middle-class entrepreneurs and technology companies end up affected. The final conclusion is that the way to grow the economy is for companies to generate income.
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