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Free keywords:
Sub-national revenue, Value-added tax, Income tax, Tax
collection, Colombia
Abstract:
This paper surveys the evolution and implications of fiscal decentralization
in Colombia in recent decades. After describing the fiscal decentralization
process and its impact on sub-national finances, the paper presents the
evolution of departmental public finances, departmental vertical imbalances
and the proposal to levy a VAT surcharge and a retail sales tax for the
departments. The paper subsequently describes the evolution of municipal
finances and municipal vertical imbalances, then includes calculations of the
effective rates of the property and land tax and the industry and commerce
tax, estimating the municipal tax burden, the efficiency rate of tax collection,
and the determinants of both. The paper concludes with policy recommendations.
