BOGOTA, Colombia (AP) — Colombia’s government has declared an economic emergency, allowing President Gustavo Petro’s administration to pass taxes by decree as the country pays off record debt while struggling to fund hospitals and the military.
The oil company issued the decree late Monday. His left-wing government recently failed to win congressional approval for a tax bill that would increase the government budget by $4 billion in 2026, a year for presidential and congressional elections.
Public spending under Petro, elected in 2022, has soared to levels exceeding spending during the pandemic. The Colombian national government’s budget until 2025 is approximately $134 billion.
The government needs more money to pay for fuel subsidies, health insurance and invest about $700 million in infrastructure to enable the military to respond to drone attacks by rebel groups, the decree said.
The government has yet to publish a law detailing the taxes to be levied during the state of emergency. Leaked documents reported by local media last week showed the government plans to impose a new wealth tax on businesses and individuals and a hefty sales tax on alcohol, including rum and wine.
Business associations have strongly criticized the order, which they say is authoritarian and designed to circumvent congressional oversight.
Bruce McMaster, president of Colombia’s National Association of Industrialists, claimed on social media that the decree was a “blatant abuse of the rule of law.”
Many analysts expect the Constitutional Court to overturn the decree. Under Colombian law, an economic emergency can only be declared when there is a serious, imminent and unexpected threat to the country’s economic order.
Jorge Restrepo, an economics professor at the University of Javeriana in Bogotá, said the government would have difficulty convincing Colombia’s Supreme Court that its decree met legal requirements.
“This is not an unexpected situation … like a war or a natural disaster,” he said of the current budget deficit. “We’ve known since the middle of last year that a fiscal crisis was brewing.”
