Pedro Nel Ospina, in an analysis published in La República, argues that Colombia needs laws better connected to reality to reduce informality. He proposes integrating people and businesses outside the formal system through more flexible rules on taxes, labor, and procedures. His legislative agenda focuses on three pillars to promote inclusive growth.
In his article titled 'Integrar para crecer: leyes que funcionen en la Colombia real', Pedro Nel Ospina describes the divide between a formal sector that declares and pays taxes, and an informal one operating outside the system due to high fixed costs and disconnected state rules. He notes that current formalization adds more procedures and costs for small businesses, and becomes unattainable for workers with variable incomes or partial schedules, perpetuating low productivity, limited credit access, and greater inequality.
Ospina proposes the concept 'Integrar para crecer' in two dimensions: incorporating those excluded to participate in economic development, and integrating tax, labor, social security, and permitting regulations to avoid contradictions and duplications. He argues that formalization should facilitate access to credit, markets, and protection, rather than serving as a barrier.
His legislative agenda rests on three pillars. First, leveling the playing field for micro-businesses and SMEs through taxes based on real profit —no tax if there are no gains— and full deduction of salary costs to encourage formal employment. Second, adapting labor legislation to Colombia's diverse economy, including hourly contracting with proportional social security contributions (for 10, 20, or 30 hours worked), along with registration and traceability mechanisms to prevent abuses, while preserving flexibility and rights. Third, streamlining procedures with free permits and licenses, a unified digital window, and development credit pathways to replace informal loans like 'gota a gota'.
Ospina, with experience in institutions such as DIAN, the National Budget, and Colpensiones, stresses that connecting systems and rules yields tangible results for citizens. In Bogotá, for instance, these measures would enable businesses to invest and hire, and workers to build real social protection. He concludes that, with good management, transparency, and political oversight, public resources are sufficient to make Colombia function.
