Posted by Newswires on Dec 30, 2010 Leave a comment

Colombia to hike taxes $1.6B to finance flood recovery

Colombia news - floods

Colombia plans to raise 3.3 trillion pesos ($1.6 billion) by lowering the threshold of the net worth tax to help fund reconstruction costs after heavy rains battered the nation, the government said on Wednesday.

Downpours pelting Colombia have forced the government to declare a temporary state of emergency, which allows President Juan Manuel Santos and Congress more flexibility to secure extra resources to recover from the disaster.

Colombia said that the government issued a presidential decree to reduce the threshold of the wealth tax to 1 billion pesos for people and companies from 3 billion pesos currently.

Santos said that Bogota had also issued a decree to sell up to 10 percent shares of state oil company Ecopetrol after lawmakers ran out of time in their current session to pass a law on the sale.

Ecopetrol, which is 89.9 percent owned by the state, sold 10.1 percent of its shares in 2007 and is already authorized to sell another 9.9 percent. The decree covers the sale of an additional stake.

The government estimates that heavy rains and flooding have caused up to $5.2 billion in damages in what Bogota calls its worst natural disaster. Bad weather has displaced 2.2 million people and killed 301 since early April, officials say. (Reuters)