OECD recommends tax reform for Colombia

The Organization for Economic Cooperation and Development (OECD) on Monday recommended tax reform for Colombia in order to boost investment.

"The Colombian economy had an extraordinarily good performance during the last decade, consistently ranked among the most dynamic economies in Latin America," said the OECD in a report called the "Economic Survey of Colombia."

"However it requires a comprehensive tax reform to stimulate investment and the economy's diversification so that the country can take the path into a stronger, sustainable and inclusive growth," said the report released Monday in Bogota.

A comprehensive tax reform is needed to make the country's tax system more favorable for investment, more efficient and fair to help improve the quality of life of Colombians, it said.

It recommended gradual reduction in corporate income tax rate and a cut in value-added tax.

A reduction of 50 percent of VAT could tackle companies' tax evasion problem, and the broadening of tax base would provide additional revenues to social plans, infrastructure and other projects, it said.

The OECD observed that Colombia can make its tax system more environment-friendly by introducing a tax on carbon.

It is a priority for Colombia to boost investment in infrastructure and it needs to reform its retirement system to reduce poverty among the elderly population, said the report.

Since 2013, Colombia has followed a roadmap that sets the process and conditions for becoming a full member of the Paris-based international economic organization, which has 34 member countries. Endi