Colombia clears tax plan to replenish coffers

Colombian lawmakers approved a tax-overhaul bill Friday, a relief for President Juan Manuel Santos as his administration seeks to recoup lost oil revenues and maintain its investment-grade sovereign credit rating.

The overhaul, which goes into effect on Jan. 1, allows the government to rake in an extra $2 billion, in 2017 by raising the value-added sales tax to 19 percent from 16 percent. That, economists say, will be enough to appease ratings firms that earlier this year warned of a downgrade unless Colombia compensated for fallen oil prices.

Source: Wall Street Journal