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Cablegate: Tax Reforms in Colombia

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS BOGOTA 011209

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN
SUBJECT: TAX REFORMS IN COLOMBIA


1. (SBU) SUMMARY. Ambassador Wood met with Colombian Minister
of Finance Alberto Carrasquilla to discuss tax reforms in
Colombia. The Ambassador offered U.S. Embassy assistance to
help move tax reforms forward. Minister Carrasquilla was
receptive to the offer and agreed that reforms were needed;
however, he expressed surprise over private sector interest
in reform The Embassy has encountered.

2. (SBU) During an October 25 meeting, Ambassador Wood
pointed out to Carrasquilla that a strong fiscal situation is
fundamental to Colombia,s continued growth. The Ambassador
stressed the need for meaningful reform to the tax system as
a key element in improving Colombia,s fiscal health. The
Ambassador also noted private sector concerns over the
perception that large businesses are paying more taxes than
smaller firms. Carrasquilla thanked Ambassador Wood for his
comments, and expressed interest in working with the U.S.
Government on this issue.

3. (SBU) The Ambassador offered Embassy assistance to help
in developing support for a reform package. The Ambassador
told Carrasquilla that a possible first step could be for the
US Embassy to invite The Minister and private sector to
exchange ideas and define reform goals. Once the GOC and the
private sector define common ground on these issues, the
Ambassador told Carrasquilla that it will strengthen
President Uribe's position before Congress.

4. (SBU) Carrasquilla admitted that of those that can pay
taxes only a small percentage do, and offered that private
sector interest would greatly influence the Congress.
However, he noted that there is a short time frame in which
Congress will be willing to tackle legislation resulting in
major fiscal reform. Emboffs noted that 2006 (right after
the next presidential elections) would be the best time to
present such a package. This would provide sufficient time
to develop proposals with broad public support. Carrasquilla
noted that communication between stakeholders was the key to
passing reforms. The DCM and Carrasquilla agreed to keep in
contact on this issue and to move forward with increased
dialogue.
WOOD

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