The Colombian Congress’s rejection of the tax reform proposal promoted by the government of Gustavo Petro has generated a wave of reactions, marked by accusations of fiscal irresponsibility, warnings about social consequences, and an air of evident political defeat for the executive, which had spent months negotiating a law intended to curb the growing fiscal deficit.
The collapse of the initiative, decided on Tuesday by an economic committee of the Senate with nine votes against and only four in favor, not only frustrated the government’s plans to raise approximately 16.3 trillion pesos (about US$4.3 billion) to finance the 2026 budget, but also reignited tensions between the ruling coalition and the opposition over the country’s economic direction, just months before next year’s elections.
Mixed reactions in Colombia after Petro’s tax reform is rejected
Since the morning of the announcement, President Petro made a public statement in an urgent tone: he warned that what is coming “begins to be seen from today” and indicated that the decision could have negative effects on the most vulnerable population. In his view, the rejection is not a technical act but the materialization of what he described as “political hatred”: In his opinion, the lawmakers who struck down the reform prioritized the interests of the wealthiest and individualism over collective well-being.
For the president, the rejection represents far more than a legislative setback. He maintains that the reform was essential to prevent the burden of an imminent fiscal deficit from falling on the middle class and lower-income sectors.
In his message, Petro questioned that, amid an economy that — according to him — is showing dynamism, the choice was made to leave intact the wealth of “the megarich” who have benefited from rising debt costs; in his interpretation, by defeating the financial bill, those resources would remain in private hands. The president insisted that if the crisis is not paid for by the rich, “the people with low-income will pay for it,” and accused Congress of favoring social selfishness over the general interest.
He also argued that the rejection leaves the state without the necessary revenue to meet its commitments, which will force the government to prioritize expenses, cut investments, or even resort to extraordinary mechanisms to deal with the lack of resources. This combination of fiscal imbalance and budget constraints, according to Petro, threatens social programs, investments in health, education, and infrastructure, and puts the country’s economic stability at risk.
Voices from the ruling coalition: frustration and calls for responsibility
Among those who support the government, the reaction was one of frustration and concern. For many, shelving the reform represents a break in expectations for redistributive policies and a lost opportunity to combat inequality and fund social programs.
Some supporters of the plan agree with the idea that without new revenue it will not be possible to sustain state spending, and warn that the parliamentary rejection exacerbates economic uncertainty.
The finance minister had insisted in recent weeks that the reform was unavoidable, and that its approval was indispensable to guarantee the state’s solvency. For sectors of the ruling coalition, the “no” represents not only a temporary blockage but a structural weakening of the executive’s ability to carry out its agenda.
“The nine senators who voted today against the Financing Law (the name the government gives to the tax reform) have disregarded what was stated by the plenary sessions of the House of Representatives and the Senate, and they generate an irresponsible defunding of next year’s budget,” said Finance Minister German Avila, referring to the Congress’ commitment when the 2026 budget was approved, which depended on the legislature’s commitment to definitively approve the preliminary agreement expressed at the time regarding the tax reform, after the government reduced its initial proposals to 16.3 trillion pesos.
Avila added that “the government will analyze all necessary measures” to ensure compliance with the already approved budget, the development plan, and the social goals the executive defends.
Tras archivo de #LeyDeFinanciamiento, el ministro Germán Ávila afirmó que la decisión de 9 senadores desconoce lo aprobado por las mayorías, que habían incluido esos recursos en el #PGN2026. Se evaluarán medidas para mantener la estabilidad fiscal y asegurar proyectos sociales. pic.twitter.com/c0wLZFHL0g
— MinHacienda (@MinHacienda) December 9, 2025
Detractors of the reform: another parliamentary defeat for the government
On the other hand, those who opposed the reform saw the rejection as a victory. For the opposition, and for many business and middle-class sectors, the proposal represented an unfair tax burden, with real risks of triggering inflation, affecting consumption, and hitting the wallets of families already facing a high cost of living. The Congress’ refusal to approve new levies was interpreted as a defense of citizens’ purchasing power.
Some critics also argued that the initiative had structural flaws: They pointed out that there was insufficient clarity about how the collected resources would be used, and no guarantees that economically vulnerable sectors would benefit. Others questioned the timing, arguing that raising taxes in an uncertain economic climate could do more harm than good.
For these groups, the rejection represented a reaffirmation of limits on a government whose style, they say, tends to impose controversial decisions without sufficient social legitimacy. They celebrate the failure of the tax reform as a triumph for fiscal balance and a check on measures that, according to them, would have unleashed adverse effects in the medium and long term.
The fall of the tax reform draws a clear line in the balance of power between the government and the legislature. It shows a loss of sufficient support for the executive — which is not new — even among former allies, and raises serious doubts about its ability to move forward with other key pending projects, such as health reform. Beyond the immediate impact on public finances, the episode reveals one of the government’s main weaknesses: It does not have a majority in Congress.
With the reform shelved, the government will have to seek new alternatives, which will probably involve more negotiations, budget cuts, or spending reconfigurations, while the opposition celebrates and cautiously monitors to ensure there is no attempt to impose by decree what could not be achieved through legislation. In this regard, on the possibility of declaring an “economic emergency,” opposition spokespeople already warned the government yesterday to refrain from going down that path.
The opposition warned that if the government uses that recourse, they will challenge it in court, arguing that the current context does not justify a “strategy” designed for other situations of public calamity, such as natural disasters or humanitarian crises — conditions that clearly do not apply after the parliamentary rejection of the tax reform.