Impacto del Impuesto sobre la Renta para la equidad – CREE en la generación de empleo

Abstract

The following essay conducts a descriptive analysis on the impact resulting from the implementation of the new Income Tax for Equality - CREE, made effective under the tax reform (Law 1607/12) - which is focused primarily on employment generation. The Income Tax for Equality - CREE - brought forth reforms directly impacting corporate profits, affecting the income tax responsibilities and thus influencing different employment-generating sectors driving "formalization" initiatives such as manufacturing, mining, agriculture and financial sectors. On the other hand, it's important to highlight the existence of other legislation’s such as: Law 50 from 1990, Law 789 from 2002, and Law 1429 from 2010 among others that have in their own way sought to reduce the labor obligations of employers in order to stimulate employment generation. The Colombia constitution upholds the principles of equality, efficiency and progressiveness, which previous tax reforms have not been taken into account - nor have they been effective instruments to achieve what is needed to reduce unemployment in the country. A clear example of this is Law 1607 from 2012, a tax reform that affected the "formality" of employment for a large section of society that benefited from the reduction of tax payments for SENA, ICBF and social security for its employees - but which ultimately generated a higher tax burden in terms of the overall Income Tax, which impacted employment generation.