Colombia's Oil Sector Rejects Proposed Tax Reform

Colombia's oil sector on Saturday hit out at a proposed tax reform that the government has presented to Congress, arguing that higher duties on corporate earnings would damage the already troubled driver of the economy.

A bill was presented to Congress on Friday that seeks to raise an additional 53 trillion pesos ($26.2 billion) over the next four years, including a tax on earnings above 1 billion pesos at 12 percent, up from 9 percent currently.

The government also extended a bank transaction tax through 2018 and will ask Congress to approve a charge on individual assets above 1 billion pesos.

"Changing the tax structure will affect the push made over the last five years that the sector has made to the economy," the Colombian Oil Association said in a statement.

Congress is expected to approve the tax reform by year end.

The oil industry, the nation's biggest exporter, is one of the main drivers of growth in the $370 billion economy, but it has been hit hard in the last year by attacks by Marxist rebels on its pipelines and infrastructure, bringing less revenue for budgeted government investments.

Also, the government has been slow to award environmental licenses for drilling.

Colombia, the fourth biggest producer of crude in Latin America, pumps less than 1 million barrels a day and has reserves of about 2.4 billion barrels, equivalent to 6.6 years consumption.

(Reporting by Luis Jaime Acosta; Writing by Helen Murphy; Editing by Stephen Powell)