Colombia’s government will declare an economic emergency in response to the Senate’s refusal to approve the finance bill that sought to secure the revenue needed for the 2026 budget.
The Senate decision left a $4.2 billion (COP16.3 billion) hole, which is more than 11% of next year’s $142.2 billion (COP547 trillion) budget.
According to Finance Minister German Avila, the gap threatens the basic functioning of government and leaves the government with no choice but to declare an economic emergency.
President Gustavo Petro said earlier his month that as long as his administration is in power, “we will not let the poor pay for” the deficit.
By declaring an economic emergency, the government will appropriate the extraordinary and temporary right to impose taxes that would alleviate the crisis by decree.
Interior Minister Armando Benedetti said on Monday that the emergency declaration has been signed by all the ministers and secures that “the burden of the measure falls on those with greater economic capacity,” i.e. the rich.
The announcement alarmed the business associations that have consistently opposed Petro’s leftist reforms and are most likely to be expected to fill the budget gap.
According to Bruce MacMaster, the president of corporate lobby group ANDI, the government lacks justification to declare an economic emergency.
Furthermore, said MacMaster, the declaration will likely be declared unconstitutional by the Constitutional Court, which has the final word about any emergency declaration.
In a response that was posted on social media platform X, Petro dismissed the business associations’ objections.
Now they are getting their act together and rushing to defend the mega-rich against taxes. But they’re running away, far from here, to raise workers’ wages.
President Gustavo Petro
In an extraordinary move, the Constitutional Court called a meeting ahead of the formal declaration of an emergency and the expected issuance of tax decrees.
Usually, meetings like this aren’t convened until after an emergency is declared.
