“Either we save ourselves or we’re screwed”: Colombia’s government warns of a 2027 default unless Congress passes its rescue law

L2Who’s affected

Contractors (the bill cuts service-provision contracts by 50%), consumers facing 19% VAT on some staples, and higher earners: health contributions stay at 4% up to two minimum wages, then rise gradually to a maximum of 8%. Officials say 19 million people would get VAT refunded and 16.5 million more up to 50%, with refunds starting Jan 1, 2028.

L3Why it’s quiet

Analysis · OVERLOOKED Fiscal fights in Bogotá play out in Spanish-language business press, and a government sounding the alarm to pass its own bill reads abroad as domestic politics.

L4Deeper impact

The bill would give President Abelardo De La Espriella powers to merge or close state entities, cut income tax from 35% to 31% for micro and small businesses, keep the financial-sector surcharge until 2030 and sell unproductive SAE assets. Gómez said talks with the IMF in recent weeks focused on the sustainability of Colombia’s public finances.

L5Full context

Restrepo blames the previous Petro government, saying it raised debt from 800 to 1,200 trillion pesos and doubled the cost of debt service (government claims). The government had said there would be no tax reform; Restrepo said the previous government hid spending. Gómez said the law covers short-term measures and the full adjustment will need further decisions.

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