Colombia could be losing up to $3.3 billion annually due to sales tax (IVA) evasion and smuggling, announced the director of Colombia’s tax agency (DIAN).
According to various Colombian media, DIAN director Juan Ricardo Ortega explained that the government loses a staggering $7 billion to $10 billion annually due to tax evasion from smuggling. He added that about $3.3 billion is lost each year due to sales tax evasion.
The tax official blamed the country’s real estate sector of being the primary culprit of tax evasion. Ortega mentioned explicitly the coastal city of Cartagena where, according to the tax official, only seven people pay property tax.
Ortega also noted that Panama recorded $1.8 billion in shipments received from Colombia, while Colombia only recorded $800 million for those exports. He believes that the extra $1 billion worth of exports does not exist or are “fictitious exports.”
The director also remarked on informal stores in Medellin and Bogota, explaining that they are responsible for moving $700 million in undocumented goods.