PM LEGAL NEWS – JANUARY 2026

Government of Colombia – declaration of economic and social emergency.

The Government of Colombia, through Decree 1390 of December 22, 2025, has declared a State of Economic and Social Emergency across the national territory for an initial period of 30 days, extendable up to 90 days. This extraordinary measure has been adopted to address a severe fiscal deficit and to ensure the availability of resources for healthcare, public security, and disaster response.

The declaration is based on the following considerations:

1. Increase in the Capitation Payment Unit (UPC) to Health Promotion Entities (EPS).
2. Recent public order crisis.
3. Threats and attacks against social leaders, with an estimated impact of COP 2.5 trillion.
4. Withdrawal of financing bills for 2025 and 2026, which sought to raise COP 12 trillion and COP 16.3 trillion, respectively.
5. Impact of the winter season, estimated at COP 0.5 trillion.
6. Pending judicial rulings requiring payment of COP 1.5 trillion.
7. Overdue contractual obligations amounting to COP 1.6 trillion.
8. Restrictions on borrowing by the National Treasury.

During the emergency period, the Government is authorized to issue legislative decrees with the force of law. Once the initial term concludes, Congress will exercise political oversight and review the measures within ten days.

Although the decree does not immediately introduce new taxes or modify existing ones, it enables the issuance of decrees that may include fiscal or administrative measures to reduce the deficit. According to official figures, the fiscal deficit closed at 6.7% of GDP in 2024 and is projected to reach 7.1% of GDP in 2025, thereby justifying the declaration.

The Government of Colombia reaffirms its commitment to safeguarding economic stability, protecting social welfare, and ensuring the continuity of essential public services. Citizens and institutions are urged to remain attentive to forthcoming legislative decrees that may be enacted under this emergency framework.

Minimum wage and transportation allowance for the year 2026

Decrees 1469 and 1470, December 29, 2025

The legal monthly minimum wage for 2026 has been set at ONE MILLION SEVEN HUNDRED AND FIFTY THOUSAND NINE HUNDRED AND FIVE PESOS ($1,750,905).

The transportation allowance has been set at TWO HUNDRED FORTY-NINE THOUSAND NINETY-FIVE PESOS ($249,095).

Tax measures for 2026

Decree 1474, December 29, 2025, adopts temporary tax measures within the framework of the State of Economic, Social, and Ecological Emergency declared by the Government, with the objective of addressing the 2026 budget shortfall.

The measures include the following:

1. Liquor will be subject to a 19% value‑added tax (VAT) on sales.
2. Taxation of gambling conducted online, whether operated domestically or from abroad, is adjusted.
3. VAT is excluded for postal traffic related to express deliveries.
4. Goods for motor vehicles and motorcycles will be taxed at a 19% rate.
5. The income tax rate applicable to the financial sector will be increased by fifteen percentage points.
6. A temporary tax is established on the extraction of hydrocarbons and coal within the national territory.
7. Financial considerations in the form of royalties referred to in Articles 360 and 361 of the Constitution shall not constitute a cost or deduction for taxpayers subject to them.
8. Provisions regarding the excise tax on cigarettes and manufactured tobacco are added.
9. Mechanisms are established for the temporary reduction of penalties and interest on arrears for persons subject to tax, customs, and exchange obligations administered by the DIAN, provided full payment is made from the effective date of this decree until March 31, 2026.
10. The DIAN is authorized to carry out reconciliation processes in administrative litigation proceedings concerning tax, customs, and exchange matters, subject to specified litigation criteria.
11. A tax for tax normalization is created, applying a 19% rate to assets that were omitted, not included in national tax returns despite a legal obligation to declare them, or that were undervalued.