The president of Colombia, Gustavo Petro, once again raised tensions in his standoff with Congress by warning that he will implement a “multibillion-dollar” cut to public spending if his new tax reform fails to be approved, although he did not specify which areas would be affected.
The announcement comes at a particularly delicate moment for state finances, following a judicial setback that struck down the economic emergency declared in December, a key tool the government had sought to use to navigate the fiscal deficit.
Petro framed the cuts as a direct response to the political refusal to raise taxes, with a message aimed at higher-income sectors: if there is no reform, there will be adjustment. In his words, the logic is simple: those who do not want to pay more taxes should not benefit from public resources.
The statement opens a new front of institutional confrontation in a context already marked by economic uncertainty and the fragility of fiscal balance in the final stretch of the presidential term and amid an imminent electoral scenario.
Colombia’s Petro warns of multibillion-dollar cuts if tax reform fails
The immediate context of the announcement lies in the Constitutional Court’s decision, made public Thursday, to strike down the economic emergency the government had declared at the end of 2025. That measure allowed the executive to adopt taxes and fiscal decisions through extraordinary means after a tax reform failed in Congress.
The high court declared the decree unconstitutional, eliminating in one stroke the government’s main tool for closing the budget gap. The decision represents a significant political and economic setback, as it forces the executive to return to the legislative route in a Congress that has already shown resistance to its proposals.
The emergency had been conceived as an urgent solution to finance state commitments, in a context of pressure on public accounts and growing spending needs. Without that mechanism, the government’s room for maneuver is drastically reduced and dependence on political agreements—so far elusive—increases.
In this regard, Petro warned that the court’s decision will have consequences for the country. “With what money is the nation’s debt paid? With your money, the money of those who pay taxes (…) So if the national debt becomes more expensive, because higher interest must be paid, who gets paid? The owners of the national debt,” Petro said at an event held Thursday in the department of Choco.
Embedded in this presidential statement is a new criticism of the Central Bank (Banco de la Republica), which Petro blames for the increase in debt due to its policy of raising interest rates.
The new reform and the threat of cuts
Faced with this scenario, Petro opted to double down. He announced that he will push for yet another tax reform focused on the wealthiest sectors, while making clear that there is a “plan B”: a massive spending cut if Congress once again blocks, as expected, the initiative.
The president has insisted that the fiscal crisis cannot fall on the most vulnerable sectors. In that vein, he suggested that the adjustment would focus on what he considers transfers or benefits to economic elites. The warning, however, has broader implications, as a large-scale cut could affect programs, public investment, and the functioning of the state.
“This crisis cannot be paid by a single worker, not a single poor person. Don’t want to pay taxes? Then don’t receive from the state,” Gustavo Petro said, clearly targeting the country’s wealthiest classes.
The backdrop is a national budget facing a significant deficit which, according to the government itself, lacks sufficient sources of financing. Without new revenue, the alternative is to cut spending—a politically costly decision with immediate economic effects, although these would not affect social programs “because the Constitution forbids it,” the president noted.
A political standoff in a decisive year
The viability of the tax reform is uncertain. The current Congress is in its final stretch—it will be renewed on July 20, following the results of the March 8 elections—and has shown reluctance toward new fiscal burdens, especially in a pre-election context. This reduces the chances of the initiative advancing, at least in the short term.
At the same time, the president’s tone reflects a strategy of direct confrontation, seeking to shift the political cost of the decision onto the legislative branch and sectors opposing higher taxes. The phrase “don’t want to pay taxes, then don’t receive from the state” encapsulates that narrative.
The episode also fits into a broader climate of tensions between the government and various economic institutions, including the Central Bank and business sector actors. Analysts warn that such clashes could affect investor confidence and increase the country’s risk perception.
The announcement of “multibillion-dollar” cuts highlights the crossroads facing the government. On one hand, it needs resources to sustain social spending and meet fiscal commitments. On the other, it faces political and legal constraints that limit its capacity to act.
All of this comes with less than four months remaining in the presidential term and with elections scheduled for next May, placing this new clash between branches of government squarely within the electoral arena rather than that of actual governance.