Colombia’s House of Representatives and Senate on Wednesday both approved a bill to raise taxes on alcohol, tobacco, and gambling, which will be used to pour an estimated COP3.5 billion ($1.8 million) into nation’s deficit-running health care system.
Through the new law, COP1.2 billion is expected to be raised through “vice” taxes on beer, liquor, cigarettes, and gambling. COP1.8 billion is expected to be raised through modernizing and consolidating the national health care system and COP500 million is to be raised through improved tax collection.
A conciliation process for the slightly different language in the House and Senate bills is set for Thursday.
The vice taxes in the bills are as follows:
The sales tax on beer is set to rise to 14% this year and 16% in 2011.
On cigarettes, a tax of COP570 is to be levied on every pack of 20 cigarettes, along with a 10% tax on tobacco products in general.
Liquors will be taxed in two categories: liquors that are less than 35% alcohol will be taxed at COP256 for each percentage point of alcohol, while those with more than 35% alcohol will be taxed at COP420 for each percentage point.
Games of chance will be taxed at a rate of 16%.