Colombia’s rich pay 14% in income tax despite the nominal rate being 33% according to a study by accounting form KPMG, Colombian media reported.
In a study which compared that rate of income tax paid by citizens across 96 countries, it was found that in Colombia those who earn more than $106,000 per year only pay 14% income tax. However this figure rises to 24% for those who earn above $320,000 per year.
Camilo Rodriguez, director of revenue management at DIAN, Colombia’s tax authority, said “Colombian law provides a number of benefits, from the fiscal planning of taxpayers which ends up reducing the tax rate.”
According to the study carried out by Javier Avila, analysis director of DIAN Colombia has one of the worst tax distributions in the world.
“Among uncontracted workers the percentage they pay in income tax does not surpass 3% and with the number of tax incentives, focused on medium and high income tax payers, means they end up paying very little,” said Avila.
According to the study the average income tax paid by a person in Latin America is 28%. In Guatemala, the average income tax paid is 31%, 27.5% in Brazil and 26.2% in Mexico.