Accessibility Tools

Web Accessibility plugin by DJ-Extensions.com

Depository of Promising Policies

Texto Introductorio de la nueva sección

Progressive taxation policies

Ley 2277 de 2022, Adopta una reforma tributaria para la igualdad y la justicia social

Standard data

Americas Colombia Law 2022

Status: In force

Link to the document: https://www.funcionpublica.gov.co/eva/gestornormativo/norma.php?i=199883

Evaluated by DeJusticia
DeJusticia

Review the evaluation

Wealth taxation: to what extent does this policy or law incorporates wealth taxes?

1
2
3
4
5

Corporate taxation: to what extent does this policy or law incorporates corporate and multinational taxes?

1
2
3
4
5

Poverty reduction: to what extent does this policy or law reduce taxes for the poorest sectors?

1
2
3
4
5

Environmental tax: to what extent does this policy or law incorporates environmental criteria?

1
2
3
4
5

Anti-tax avoidance measures: to what extent does this policy or law incorporates anti-tax avoidance measures?

1
2
3
4
5

Transparency: to what extent does this policy or law incorporates tax transparency?

1
2
3
4
5

Participation: to what extent does this policy or law incorporates participation measures?

1
2
3
4
5

Qualitative analysis

Why is it promising?

Wealth taxation: Law 2277 made the wealth tax permanent. It established that individuals with net wealth equal to or exceeding 72,000 Tax Value Units (UVT) as of January 1 of each year would be subject to the tax and introduced progressive marginal rates of 0.5%, 1%, and 1.5%, depending on the level of wealth; the 1.5% rate was initially established as a temporary rate through 2026. The Law also introduced rules governing the tax treatment of assets held through trusts, private-interest foundations, and other fiduciary arrangements. These measures strengthened progressivity by requiring individuals with large fortunes to make a greater contribution and sought to reduce opportunities to keep wealth outside the tax base through certain legal structures.
Multinational corporations and large companies: The reform introduced several mechanisms. First, it established a minimum 15% Adjusted Tax Rate (Tasa de Tributación Depurada – TTD) for certain corporate income taxpayers. Second, it introduced the concept of Significant Economic Presence (Presencia Económica Significativa – PES), under which non-resident individuals or entities not domiciled in Colombia that earn certain types of income from the sale of goods or provision of services to customers or users located in Colombia may be subject to income tax, even without a traditional physical presence in the country. PES was particularly relevant for adapting the tax system to the digital economy and strengthening Colombia's ability to tax income generated in its market by foreign companies.
Extractive industries and royalties: Law 2277 originally established that royalty payments for the exploitation of non-renewable natural resources could not be deducted from corporate income tax, seeking to prevent payments made in exchange for exploiting State-owned natural resources from reducing the corporate income tax base. This was one of the reform's most ambitious measures aimed at increasing the tax contribution of the extractive sector. However, the provision was subsequently declared unconstitutional by the Constitutional Court in Judgment C-489 of 2023. As a result, part of the revenue-raising and redistributive capacity originally envisioned by the reform was reduced.
Combating tax evasion and avoidance: The Law introduced a specific set of measures to combat tax evasion and avoidance. Among other provisions, it amended rules concerning the place of effective management, introduced controls over certain transactions that could artificially reduce taxable wealth, and strengthened documentation and traceability requirements for transactions. These provisions are important because a progressive tax reform depends not only on increasing tax rates, but also on preventing taxpayers with high economic capacity from artificially reducing their tax liabilities.
Transparency and traceability: The reform strengthened various information-reporting and electronic documentation mechanisms, seeking to provide the tax administration with better information to verify transactions and tax obligations. These measures can indirectly contribute to greater transparency and stronger tax enforcement. However, this is one of the areas in which the reform was less transformative: it did not establish a comprehensive fiscal transparency system that would allow citizens to easily identify who benefits from major tax expenditures, how much these benefits cost, what results they produce, and how they are distributed across economic sectors and groups.
Poverty and inequality: The Law explicitly sought to contribute to greater equity, progressivity, and efficiency of the tax system, while supporting social spending and advancing toward a more equitable society. To achieve this, it combined measures such as the permanent wealth tax, changes to the taxation of higher-income individuals, and increased taxation of certain sectors and economic activities. However, the Law did not itself establish a comprehensive system of transfers or specific poverty-reduction programs automatically financed with the additional revenue. Its ultimate impact on poverty and inequality therefore depends on whether increased tax revenues are subsequently translated into progressive and effective public spending.
Overall assessment: Law 2277 was particularly promising because it did not merely seek to increase tax revenues; it also sought to change the composition and distribution of the tax burden through higher taxation of large fortunes, strengthened corporate taxation, new rules applicable to foreign companies and the digital economy, and measures to combat tax evasion and avoidance. Its main limitation from a redistributive perspective is that improving the progressivity of taxation is only one component of fiscal policy. To achieve sustained reductions in poverty and inequality, these reforms must be complemented by progressive, transparent, and effective allocation of public expenditure.

What are the risks?

Revenue sustainability risk: Some of the reform’s expected revenues may not be permanent or may fall short of projections. In addition, judicial decisions can reduce expected revenue, as occurred when the Constitutional Court struck down the rule prohibiting the deduction of royalties from corporate income tax. This weakens the reform’s capacity to provide a stable source of financing for social policies.
Tax avoidance and wealth-planning risk: Higher taxation of large fortunes and high-income taxpayers can create stronger incentives to reorganize assets, use corporate or fiduciary structures, or exploit exemptions and valuation rules to reduce taxable wealth. The effectiveness of the reform therefore depends heavily on the tax administration’s enforcement and information-gathering capacity.
Limited impact on inequality: Although the reform makes parts of the tax system more progressive, progressive taxation does not automatically translate into lower inequality. Its redistributive impact depends on how additional revenues are allocated and whether public spending effectively reaches lower-income and vulnerable populations.
Limited impact on poverty: The reform primarily addresses the revenue side of fiscal policy. It does not, by itself, guarantee that additional revenues will finance specific poverty-reduction programs. Therefore, improvements in tax progressivity may coexist with persistent poverty if social spending, transfers, employment policies, and public services are insufficient or poorly targeted.
Corporate taxation and investment risk: Higher effective taxation of certain companies and sectors may affect investment decisions at the margin, particularly when firms perceive the tax framework as unstable or frequently changing. However, this risk should not be assumed automatically: its magnitude depends on the sector, type of investment, effective tax burden, and broader business environment.
Implementation and administrative-capacity risk: Measures such as the minimum effective corporate tax rate, Significant Economic Presence (PES), and anti-avoidance provisions can be technically complex. Their success depends on the DIAN’s capacity to obtain information, audit sophisticated taxpayers, enforce the rules, and address cross-border transactions.
International tax coordination risk: Taxing multinational and digital businesses is particularly challenging because companies operate across jurisdictions. The effectiveness of Colombia’s measures depends partly on international cooperation, information exchange, tax treaties, and developments in international tax rules.
Legal and constitutional risk: Ambitious tax measures may face constitutional challenges. The royalties decision illustrates that a measure can pursue progressive or revenue-raising objectives but still be struck down if its design conflicts with constitutional principles. This creates uncertainty about both future revenue and the durability of reforms.
Transparency and accountability risk: Increasing revenue without simultaneously strengthening transparency around tax expenditures, beneficiaries, enforcement outcomes, and the eventual use of additional resources makes it more difficult to assess whether the reform is actually achieving its equity objectives.

Additional information

Although Law 2277 of 2022 introduced several ambitious measures aimed at making Colombia’s tax system more progressive, some of its most significant provisions faced strong political, business, and legal opposition and were subsequently challenged before the Constitutional Court. One of the most consequential cases concerned the prohibition on deducting royalty payments from corporate income tax for companies exploiting non-renewable natural resources. In Judgment C-489 of 2023, the Constitutional Court struck down this provision, finding that its specific design violated the principles of tax equity and fairness, particularly because it generated unjustified differences between companies paying royalties in cash and those paying them in kind. Importantly, the ruling did not reject the broader objective of increasing the fiscal contribution of the extractive sector; rather, it found the mechanism chosen by Congress constitutionally problematic. Other central components of the reform were also challenged, including the permanent wealth tax, the taxation and withholding of dividends, and provisions of the simplified tax regime, reflecting the significant legal and political contestation surrounding the reform. However, many of these challenges did not result in the measures being struck down, underscoring the distinction between provisions that were politically or judicially contested and those ultimately declared unconstitutional.

POLICY INNOVATION IS HAPPENING.

FIND IT. COMPARE IT. LEARN FROM IT.

Governments and public institutions around the world are developing new approaches to some of today's most pressing challenges: ensuring universal access to quality public services, building care systems, reducing inequality and mobilising public resources more fairly.

Yet promising policy innovations are often difficult to find, compare, and assess across countries.

The Global Policy Depository brings these experiences together in one analytical platform.

It identifies concrete laws and policies adopted by States and inter-State organisations and examines their potential to advance rights, reduce inequalities, and transform public systems.

Image

SITEMAP

TAKE ACTION

NEWSLETTER

Don´t miss any updates!
SUBSCRIBE
Image

Social Media:

Log in

Climate and Environmental Justice

We have advanced rights-based and gender-transformative transition frameworks through research that centres the lived experiences of women and marginalised communities on the frontlines of extractive energy policies, promoting climate and energy frameworks attentive to the social and care-related impacts of transition pathways. We have developed a clear vision for a gender-just transition, firmly rooted in gender and human rights norms, establishing both the legal basis and the direction for the transformative changes our planet and societies urgently need. In particular, the ‘Guiding Principles for Gender Equality and Human Rights in the Energy Transition’, a collective effort built through online consultations, an in-person workshop and multiple rounds of revision with activists, practitioners and experts from around the world, outline a transformative vision for reshaping global energy systems through a human rights and gender equality lens.

Our work recognises that the climate emergency is both an existential threat and an opportunity to reimagine societies built on social, gender, economic and environmental justice. We ground our advocacy in feminist and intersectional principles, prioritising the agency and perspectives of communities in the Global South who have contributed the least to the climate emergency yet face its most devastating consequences. Central to our approach is the understanding that energy is not merely a commodity but a fundamental human right; essential for dignity, health, education, work and the realisation of countless other rights. We challenge approaches to the energy transition that risk replicating the harmful patterns of fossil fuel extraction and, instead, advocate for transformative policies that ensure human rights and gender equality as central to building climate-resilient societies rooted in dignity, justice and planetary well-being.

What's next?

We will continue to challenge approaches that treat energy transition as merely a technical shift, instead positioning it as an opportunity to reimagine economies and societies rooted in dignity for all, with particular attention to communities in the Global South who have contributed least to the climate emergency yet are most exposed to its worst effects.

We will connect community-level evidence and the lived experiences of those on the frontlines of extractive policies to national reform and global norm-setting, breaking down silos between human rights, gender, and climate movements, and advancing a shared vision that recognises just transitions as not only fundamental to achieving climate-resilient and sustainable societies, but as transformative pathways that advance social and gender equality, redistribute power and resources equitably, and ensure that energy systems serve the public good rather than profit.

We will mainstream rights-based and genderjust transition priorities in key multilateral spaces (particularly, within the Just Transition Work Programme and the to-be-developed Just Transition Mechanism, within the UNFCCC) to guarantee that just transitions are advanced at all levels.

We will also translate our work, through strategic advocacy, into at least two concrete policy wins, whether promoted, adopted, implemented, or scaled, in priority countries (Argentina, Brazil, Chile, Mexico, Colombia, South Africa, or Kenya), ensuring these policies align with human rights standards, centre gender equality, and reflect the needs and views of affected communities.

We will build momentum for the progressive recognition of the right to sustainable energy to shift dominant narratives away from purely extractive solutions that sideline gendered impacts, community participation, and Global South perspectives.

Economic Justice and Climate Finance

Our work has transformed the global discussion on fiscal policy in a more just, emancipatory and sustainable direction. Our approach has combined both high-level, expert contributions within decisionmaking circles, with bold, impactful work on narrative change with the general public.

We have been instrumental in the inclusion of human rights as a guiding principle of the future United Nations Framework Convention on International Tax Cooperation, a multilateral instrument with the potential of raising approx. USD 492 billion per year in public revenues currently foregone to global tax abuse. In the process leading to the ‘Compromiso de Sevilla’ decided at FfD4, we proposed and succeeded in creating a specific human rights workstream within the Civil Society Financing for Development Mechanism, which was critical to ensure that explicit commitments on the matter were included in the negotiating outcome. In a context of cutbacks in multilateral institutions, we have amplified the capacities of technical experts, providing rigorous technical support and leveraging our influence to ensure the enactments of groundbreaking standard-setting instruments, such as the 2025 UN Committee on Economic, Social and Cultural Rights Statement on Fiscal Policy and Human Rights, and the first ex oficio hearing on the Inter-American Commission of Human Rights on Fiscal and Economic Policies to Address Poverty and Structural Inequality, leading to an upcoming thematic resolution on the matter. We have also bridged the silos between multilateral tax discussions and climate finance debates, promoting ambitious financing commitments to increase international and domestic resource mobilisation during COP 28, 29 and 30.

At the regional level, our engagement with fiscal cooperation platforms such as the Platform for Fiscal Cooperation of Latin America and the Caribbean (PTLAC), where we are member of its Civil Society Consultative Council, and the African Anti-IFFs Policy Tracker, for which we participated in the pilot mission in Ivory Coast together with Tax Justice Network Africa (TJNA), have been critical in cementing a growing engagement between tax administrations and ministries of finance with international legal experts, exploring actionable and transformative initiatives, such as the taxation of high-net-worth individuals, beneficial ownership registries and corporate countryby-country reports, to be implemented at the international level.

At the local level, our interventions in fiscal reform debates in Chile, Brazil, Colombia and Nigeria have contributed to shaping legislative outcomes in a more progressive, rights-compliant direction.

As for our leadership in narrative change, we have a measurable track record in delivering tailored, innovative campaigns which have decisively expanded economic justice constituencies by appealing to a broader tent. In Latin America and the Caribbean, we created the ‘Date Cuenta’ campaign, coordinating over 40 organisations across civil society to deliver plain language, innovative messaging connecting progressive fiscal reforms to the financing of health, education and social protection. ‘Date Cuenta’ generated over 55 original campaign messages that were tailored to the realities of seven priority countries (Argentina, Chile, Colombia, Mexico, Paraguay, Peru and Honduras) and disseminated in Spanish, Portuguese and English. In doing so, we convened more than 65 online co-creation workshops with partners, coordinating a unified communications strategy which combined digital outreach, press and media coverage, and collaboration with influencers. Ultimately, ‘Date Cuenta’ resulted in more than 60,000 interactions on social media, coverage in major regional and international media outlets, including El País, Deutsche Welle, Bloomberg and France 24, and the participation of at least 63 social media influencers through 58 dedicated publications. In collaboration with Fundación Gabo and the Friedrich Ebert Stiftung, we also organised a two-day workshop in Bogota with 20 journalists from 13 countries, building a regional network trained in a human rights-based approach to fiscal policy that has since generated published media coverage on outlets such as La Diaria, Ciper, El Diario Ar and Milenio. Through ‘Date Cuenta’ and our regional advocacy, we strengthened civil society engagement in key processes, including the Financing for Development track and FfD4, co-organised highlevel dialogues with states and civil society from Latin America and Africa.

What's next?

We will shape the UN Tax Convention and its Protocols so they embed human rights principles, and we will stay engaged through follow-up processes (including the expected Conference of the Parties) to support effective implementation. We will keep linking tax and climate finance so that new resources mobilised through fiscal cooperation are channelled to adaptation, mitigation, and loss and damage, in line with UNFCCC commitments.

Public Services for Care Societies

We have translated participatory research into accountability and policy outcomes.

In Ivory Coast, our work with Mouvement Ivoirien des Droits Humains and affected communities since 2023 exposed how privatisation and lack of accountability restrict access to quality healthcare. It contributed to the closure of 1,022 illegal private health centres, an executive instrument strengthening the regulation of private hospitals across the country, and the creation of a permanent complaints management committee in healthcare through a bylaw issued by the prefect of Gagnoa. Partners engaged through this process also advanced concrete improvements at facility level: members of the Gagnoa Midwives Association who took part in the participatory action research pooled resources to renovate the neonatal unit of the Regional Hospital, and the Director of the Gagnoa General Hospital launched an action plan to expand services and improve patient reception, with the facility receiving the award for best hospital in the country in 2025.

In Kenya, our research with the Mathare Education Taskforce documented the absence of public schools and the expansion of private provision, evidencing impacts on households and caregivers and strengthening demands for free, quality public education. This work contributed to stronger community agency and collective organisation, alongside ongoing strategies ranging from communications to litigation to secure a public school in the area, some involving GI-ESCR and others led independently.

Across Africa, this work is complemented by a multi-country study examining the human rights implications of austerity in education and health, including how regressive fiscal policies, rising debt burdens and persistent underinvestment undermine the financing and delivery of public services.

In Latin America, from 29 November to 2 December 2021, over a thousand representatives from over one hundred countries, from grassroots movements, advocacy, human rights, and development organisations, feminist movements, trade unions, and other civil society organisations, met in Santiago, Chile, and virtually, to discuss the critical role of public services for our future. Following the meeting, the Santiago Declaration on Public Services was adopted to demand universal access to quality, gender-transformative and equitable public services as the foundation of a fair and just society.

We are currently advancing work on care systems, linking public services and fiscal justice through integrated research, advocacy and communications, including a regional campaign framing care as a collective responsibility requiring sustained public investment.

What's next?

In Ivory Coast, we will evaluate and strengthen the complaints management committee and position it as a replicable model for other health facilities. In Kenya, we will support the Mathare community to co-design a model public school for Mabatini and Ngei wards, grounded in human rights standards. Building on our multi-country austerity study, we will drive national advocacy on financing for education and health: advancing reforms in Ghana; launching a fiscal policy and public services financing agenda in Kenya through the CESCR process and targeted coalition work; and, in Nigeria, using the new tax acts in force since 1 January 2026 to catalyse a national accountability campaign for adequately funded, quality public services. In Latin America, we will amplify locally led care pilots across 8 countries and turn lessons into influence—advancing care policies that strengthen care organisations, protect care workers’ rights, support unpaid caregivers, include disability and family networks, and redistribute care more equitably.