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What do they do with the money from the gasoline surcharge

In May 2018, a news item was displayed in various media according to which about 20 vehicles lost their tires and suspensions due to a gap in the North highway with 223 street, in the north of Bogotá. Almost a year later, in March 2019, another 30 cars and their drivers repeated the story on the same road.

We bring this story today because this week the Congress of the Republic approved the fuel surcharge, in compliance with ruling C-30 of the Constitutional Court, which for now, and until 2023, it does not imply an increase in the price of regular and extra gasoline, and the (fuel oil for engines).

This means that the Nation, the municipalities and departments already have guaranteed resources that have largely gone over the years to finance mass transportation systems and other infrastructure works, all of them, with the contribution that car and motorcycle owners make every time they fill their tank. In contrast, the gaps are still there.

In 2019, the gasoline surcharge and the ACPM raised a total of 2.7 trillion pesos, approximately, of which the Nation collected $ 310,000 million as a surcharge to the ACPM.

The territorial entities, according to figures from Asocapitales, the association of the country’s mayors, collected a surcharge on gasoline and ACPM a total of $ 2.4 trillion pesos, of which $ 1.6 trillion was a surcharge on gasoline for all municipalities, $ 945,000 million were for the capital cities and $ 687,000 million for the rest of the municipalities. The departments collected $ 766,000 million in surcharges on gasoline and ACPM.

What did Congress do?

The Congress of the Republic had to resolve, definitively, an unenforceability ruled in 2019 by the Constitutional Court, which considered that in Law 488 of 1998, the Legislature was wrong by not specifying the taxable base of the tributeInstead, it delegated the function to the Ministry of Mines and Energy.

This error has led to the fact that the share of the surcharge in the tax revenues of the territorial entities has fallen, going from 8.8 percent at the beginning of the decade to 5.7 percent in 2019. To correct this, the Government summoned Congress to extra sessions, last Monday and Tuesday.

Once the law comes into force, if regular gasoline, extra gasoline or ACPM increase in price, the value of the surcharge will not increase as it is a fixed tax estimated in pesos, and which will also be frozen until 2023.

The gasoline surcharge was incorporated as a new fuel tax since 1989 with Law 86. It is currently a tribute that is governed by Law 488 of 1998, which yields about 90 percent of the tribute to the territorial entities.

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As approved by Congress, the general rate from the entry into force of the law will be as follows: regular gasoline in municipalities and districts, $ 940; departmental, $ 330 and Capital District, $ 1,270. Extra gasoline in municipalities and districts, $ 1,314; departmental, $ 462 and Capital District, $ 1,775.

As for the surcharge to the ACPM, the rate will be $ 301 per gallon. The surcharge to the ACPM for consumption in border municipalities will be settled with a rate of $ 204 per gallon for the domestic product and $ 114 per gallon for the imported product.

The new law states that the ACPM surcharge will be charged by the Nation and 50 percent distributed for the maintenance of the national road network; and another 50 percent for the departments, including the Capital District, destined to the maintenance of the road network.

This does not change the reference price structure for gasoline and diesel fuel or neither does the final price of fuel increase in real terms to user.

Surcharge, another tax that was born to stay

Surcharge, another tax that was born to stay

What do they do with those resources?
“The gasoline surcharge constitutes a current income of free destination that mainly finances the investment of the municipalities, departments and districts and also of the Nation, according to the priorities defined in the respective development plans ”, explains Luz María Zapata, director of Asocapitales.

“With this tribute The main infrastructure works of the Integrated Transportation Systems have been materialized Massive, as is the case of Medellín, Pereira, Cartagena and Bogotá, among other cities ”, adds Mrs. Zapata.

In the end, with the decision of Congress, going forward and year after year, municipalities and departments will have guaranteed resources that represent for the former around 16 billion pesos (including capitals) and for the departments about 7.6 billion pesos.

What vehicle and motorcycle owners do not have assured is that the streets of their cities are in optimal condition, because in the case of Bogotá, the surcharge is intended for the TransMilenio road infrastructure and its trunks, and it is also pledged.

Meanwhile, the owners of the 50-something cars that were damaged on the North Highway two years ago they will have to continue not only contributing to the city with more taxes (See attached note), but by paying for the costly repairs of their vehicles, which, persecuted and with restrictions, became the milking cow of the municipalities.

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