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Colombia: A "health tax" will be levied on these products

Souhangwang https://www.sofreight.com/school/souhang_information_article?id=66164 2023-11-03 10:36:14

Colombia: A "health tax" will be levied on these products!

This November, one of Colombia’s most controversial taxes in recent years is coming, the “health tax.”
According to a recent report by Colombia's "Weekly", starting from November 1, certain products will be subject to additional taxes based on their sodium, fat and sugar content, which is the first time in Colombia.
Chapter 10 of the tax reform stipulates that the following ultra-processed beverages will be affected by the tax: carbonated drinks or carbonated soft drinks, malt drinks, tea or coffee drinks, fruit drinks of any concentration, functional drinks, sports drinks, etc.

It's not just sugary products that will be taxed, foods containing sodium will also be taxed. Prices will increase for many products such as sausages (except for some types), sweets, chocolates, pasta, cereals, bakery products, pies, jams, sauces, ice cream and many more.

At the beginning of the implementation of the measures, the tax rate on these products is 10%; but by 2024, the tax rate will increase to 15%; in 2025, it will continue to rise to 20%. According to government estimates, the health tax will bring in 2.658 billion pesos by the end of 2024; health tax revenue will rise to 3.898 billion pesos in 2025; and 4.14 billion pesos in 2026.

It is reported that the tax amount of each product will depend on its ingredient content. For example, if the sugar content of ultra-processed drinks reaches or exceeds 6 grams per 100 ml, tax will be required, and 6 grams to 10 grams will follow a tax standard. 10 grams is subject to another tax standard.

In addition, in the initial stage of the implementation of the health tax, the taxation dividing line is 6g/100ml, and the tax will start from 5g/100ml two years later.

The same goes for sodium content, except it is calculated per 100g: if the sodium content reaches or exceeds 300 mg per 100g, the product will also be taxed.

Colombia's Ministry of Finance emphasized that small producers will not be affected by the health tax, as they are only obliged to pay the tax if the sales revenue of these products exceeds 424 million pesos.