Finance Minister Germán Ávila announced the declaration of an economic emergency following the failure of the tax reform, aiming to fund $16 trillion for the 2026 National General Budget. The draft decree includes taxes on assets, alcohol, cigarettes, and a special levy on hydrocarbons and coal. Business guilds such as Andi, ACM, and ACP question its constitutionality and effectiveness.
On December 19, 2025, Finance Minister Germán Ávila confirmed the Gustavo Petro government's intent to declare an economic emergency due to a $16.3 trillion shortfall in the 2026 National General Budget, following Congress's rejection of the tax reform. "The revenue target of the economic emergency is $16 trillion. We expect to recover the resources that Congress defunded from the national budget," Ávila stated.
The draft decree, consisting of three chapters, outlines tax measures to raise the necessary funds. The first chapter establishes an asset tax for legal entities starting January 1, 2026, applicable to net assets equal to or exceeding 40,000 UVT (approximately $1.991 million). The second chapter revives indirect taxes similar to those in the failed reform, including a levy on alcohol of $750 per alcohol degree in 750 ml containers plus 30% ad valorem, and on cigarettes of $11,200 per pack of 20 units plus 10% ad valorem. It also includes raising the financial transaction tax from 4x1,000 to 5x1,000, and taxes on online games of chance.
The third chapter introduces a temporary 1% tax on the extraction of hydrocarbons and coal, affecting exports by companies with net income over 50,000 UVT.
Business guilds reacted swiftly and critically. Andi President Bruce Mac Master requested the Constitutional Court to provisionally suspend the decree, arguing there is no supervening event or grave economic disruption, as the $16 trillion amounts to just 2.9% of the $546 trillion budget. "There is no clear explanation for considering that a 2.9% shortfall could have repercussions of such magnitude," he noted.
ACM's Juan Camilo Nariño called the measure "inadmissible" and a grave precedent for the rule of law. ACP's Frank Pearl stated that "there is no supervening event today that justifies the declaration" and that it violates the Constitution. Fedesarrollo's Luis Fernando Mejía agreed that the amount does not threaten the economic order, representing less than 3% of the budget.
This would be the fourth economic emergency under Petro and the tenth in three decades, amid rising public debt, health sector debts, and security needs.
