Its all about perspective

Tax and how much everyone hates it

Much of the Twitter space are around the topic of taxes. I do believe how exaggerated is the fact to pay a big chunk of your money to the government, we pay and don’t really get to see a direct benefit from it, is not like a economic transaction where you can see or feel a real benefit. The money just goes away.

What you get to see in Colombia is that we pay taxes in several forms:

-Day by day most of the products include 19% of IVA (VAT value added tax) which I think is really high, they promised to lower it but by the country they raised it.

-If your income is high enough you need to declare and maybe pay some (but not too many people pay because incomes are not that high and you can always hire an accountant to help you do that).

-If you have real estate or a car, you pay taxes on it every year.

-When doing transactions of money you pay 4 pesos for every 1000 you moved (4x1000)

-If your net worth is high enough you also need to pay a tax for it (impuesto sobre el patrimonio)

And thats just a quick overview and the few of the taxes I remember, I am not an expert on the subject. And thats not it, if you have a company you also need to pay taxes. I do believe is crazy the amount of taxes a country like Colombia has.

The reality of taxes here is what I mentioned you before, even if the system has a lot of taxes, not everyone would pay a single dime (besides de VAT), the fact that salaries are not high enough and that majority of the people are not really rich, with a good accountant people usually just don’t pay nothing.

Compare to US or Canada, I know back there everyone needs to disclose their income and pay taxes. Usually discounted from their cheques when you are a worker and I guess when you have investments and business, you need to pay extra tax depending on the income or profits you made.

Again, I do believe is an exaggeration any kind of taxation. Once you pay you know you can’t control that money.

Imagine close to your home there is a big pot hole, you already break two tires from catching it while raining. You pay taxes but the next day the pothole stays the same. You know government is not going to reimburse you for your flat tires but still you have to wait for it to be fixed, you can do nothing but wait. They fix it 4 months later but after 5 months the pot hole comes again but bigger…

Sadly it happen to me 😂.

Same happens with public goods or services. You would expect nice streets, good public transportation, security and funds for it to make it better. But sadly it never gets better.

And here is my point, it’s all about perspective. I guarantee you that if you ask a Colombian if he would care to pay more tax if they get to see a benefit fro it, they would accept. Problem is here they don’t like to fix problems. Politicians are too corrupt to care.

Thats why people that go to US, Canada or Europe first thing they notice is how much secure everything is, how much better are roads and efficient public transportation (in some cities). If you ask them they will say “at least we pay taxes but we see the benefit from it”.

Thats what I say it all about perspective. People sadly get used to corruption and living around the fact that government dont really care or have the will to fix basic problems that are basic. Even if taxation is a form of theft, imagine paying taxes in a place where you don't get to see a benefit from it…

My best advice is when planning to move to Colombia, a good accountant is a must. You definitely want to make sure your finances and income is protected by avoiding paying a hefty amount of tax.

If you are interested in moving here or planing to come to visit and dont really have a plan, I provide a consultation service where I can help you get your doubts resolved, click the link for more info: