Thirteen officials from Colombia’s national tax collection agency (DIAN) were arrested Tuesday in conjunction with a $150 million embezzlement scheme, according to the Prosecutor General’s Office.
Five ex-agency employees and a Bogota Chamber of Commerce member were also taken into custody, joining the 61 other individuals already processed in relation to the scheme, which targeted the cities of Medellin, Bogota, and Barranquilla, three of the country’s largest.
“After a year and a half of coordinated efforts between the Prosecutor General’s Office, the DIAN, the Ministry of Finance, and the National Police, we have been able to take apart various criminal structures operating within the Bogota DIAN and on a national level, defrauding the public through [unlawful tax returns],” said Prosecutor General Eduardo Montealegre.
The criminal ring would reportedly fake exports of textiles and food products to take advantage of a Colombian law qualifying exporters for a refund of the sales tax (VAT) they were forced to pay on their activities. The refund is an incentive the government uses to encourage export production, according to a press release from the Prosecutor General’s Office.
Over several years, the embezzlers managed to sap a reported $150 million from the Colombian government. According to Montealegre, authorities have seized 454 assets and expect to be able to recover $35 million — just over 20% — of the stolen money.
Finance Minister Mauricio Cardenas assured that in the future, the state would “deal more blows to structures defrauding the state,” while National Police Chief General Rodolfo Palomino said the arrests “evidence the investigative capacity that a united state front possessed under the direction of the Prosecutor General’s Office. This represents a blow to corruption and allows us to reclaim confidence in the lawful collection of Colombian taxes.”
Montealegre went on to say that additional efforts to regulate VAT exemptions has brought in increased revenue for the state.
“This year, between January and April, the collection of IVA was close to $4 billion, while one year ago, it was at $3.2 billion. That represents a growth of 29%.”
DIAN officials indicated that the scandal has exposed various problems in current operating procedure that are being addressed. The officials said that many DIAN employees had expressed receiving threats and intimidation from various criminal elements, and were glad to count with support from the relevant authorities.
The body charged with overseeing Colombian tax collection has also reportedly been made to accept various disciplinary reforms.