The Constitutional Court ordered Petro’s government to return US$6.9 million in taxes, which means another serious setback for the government of President Gustavo Petro. The Constitutional Court struck down a decree from last December (1474 of 2025) that had given life to a broad package of taxes. That decree, in turn, implemented the economic emergency (Decree 1390 of 2025), which had also received an unfavorable opinion from the high court.
Decree 1474 of 2025 ordered an increase in the value-added tax (VAT) rate on alcoholic beverages and gambling, as well as the collection of a wealth tax for individuals whose net assets were equal to or greater than 2,094 million pesos (about US$580,000). However, the magistrates of the court voted unanimously 8 to 0 against the decree, and only two, Vladimir Fernandez Andrade and Hector Carvajal Londoño, issued concurring opinions.
What is serious for the government is that in its ruling, the Constitutional Court orders that direct taxes that would have been modified or generated while the decree produced effects “not be subject to declaration, liquidation or collection by DIAN (the tax office), and that those that have been paid in advance be refunded.”
DIAN must facilitate the return of the money
At the same time, the guardian tribunal of the Constitution of Colombia ordered that taxes that were paid indirectly during the same period must also be refunded to the taxable persons who “materially made the payment and can substantiate it.” The amount that the government would have to return amounts to 25,000 million pesos (US$6,900,000).
The court also determined that DIAN must establish legal mechanisms or even a new specific one to comply with its orders within 30 days following notification of the ruling.
“Taking into account Judgment C-075 of 2026, the Plenary Chamber of the Court declared, as a consequence, Legislative Decree 1474 of Dec. 29, 2025, unconstitutional, ‘by which tax measures are adopted aimed at addressing the expenses of the General Budget of the Nation necessary to deal with the state of emergency declared by Decree 1390 of 2025,’” the Court explained in its decision.
With the economic emergency of which the decree struck down by the Constitutional Court was part, the Government sought to raise around 11 trillion pesos (US$3.04 billion) through a package of taxes affecting different sectors: On the one hand, it contemplated increasing the VAT rate from 5% to 19% for alcoholic beverages, wines, aperitifs and similar products, and an increase in the consumption tax on these products, with a specific component of 750 pesos (US$0.21) per degree of alcohol and another 30% ad valorem on the retail sales price.
In the case of cigarettes, the decree established a special tax of 11,200 pesos (US$3.10) per pack of 20 units, and taxed vapes and electronic cigarettes with a rate of 2,000 pesos (US$0.55) per milliliter of liquid, plus an additional 30% on the retail sales price.
The money that the government must return through DIAN is reflected in a statement published by the Ministry of Finance on Jan. 31, in which they reported the collection of 23,800 million pesos (US$6,370,000) in fiscal stability tax and 1,200 million pesos (US$332,000) on liquor imports.