The IMF praised Colombia’s progressive tax overhaul, widely labeled as the “wealth tax,” as its representatives met with Finance Minister Mauricio Cardenas in Washington earlier this week.
Alejandro Werner, director of the IMF’s Western Hemisphere division, considered the tax reform a further consolidation of the fiscal responsibility of the country.
“[Colombia] is starting the discussion on the next tax increases that are necessary in order to contain the costs and contingencies that are being displayed for the future. This is is the right attitude,” he said.
The IMF recently updated Colombia’s growth forecasts in its recent global report. The report notes that Colombia will grow at 4.8% this year and 4.5% in 2015, while maintaining unemployment below double digits through the end of next year.
Colombia’s growth, the third largest in the world so far this year, is in stark contrast to the Fund’s predictions for Latin America as a whole, which is expected to grow at just 1.3% by the end of 2014.
In an interview with Bloomberg, Colombia’s finance minister said that although the country is growing, we need to make the proper investments in security and social equity in order to sustain that growth over the long time. This is the main reason of the wealth tax.
MORE: Breaking down Colombia’s tax reform and new wealth tax