Business and the Government in Colombia

[Don Gringo]

This will be based on my own observations in Colombia and not a governemnt or UN study. Therefor of course it will be more reliable and also may conflict with someones data..... haha

First the small businessman in Colombia. Typically he is registered as a business and pays a tax which is voluntary and not a whole lot of oversight going on here. DIAN (Colombian IRS) passes a couple times a year unnanounced in a walkathon down the street and the businessman pays a percentage in tax on his sales, if he doesn't close his doors before DIAN gets there. ;) Everyone cheats this btw, the only thing you can not cheat is the license, it is very easy to get and very cheap. You can operate a business here for a month without it to see how your sales are then you need it. If you import goods for sale you have to show the tax trail legal or you lose your things. Ways around this as well.... If you don't have your license when DIAN passes by they can load a truck up with all your things. If you don't pay the tax they seal your business shut until you pay.

All kinds of ways around these things and the businessman in Colombia is a shrewd businesssman. Is it any wonder why when they get to the US they do very well in Business?

[Rubito]

This is very accurate. In my experience however it's not so easy to get around these things. All the people I regularly work with actually do things by the book, they make you bring your EPS proof of payment in, pay rete, IVA, and import stuff legally. I'm actually surprised, because I certainly would do no such thing myself if I could help it!

[Don Gringo]

For me it would be very hard to play by the rules when I look up on the hill and see where all the tax dollars go, Mercedes, Large apartments, homes in Miami, London, etc. They are a corrupt bunch so to me if the system were regulated and not completely corrupt I would say play by the rules. But I am not so nieve to fall for all the DIAN commercials as paying taxes is patriotic.

Bullshit. That is the way some people make their living by skimming off the account. If people don't pay then the corrupt don't get paid. The other side of it is people want to pay a cheap price not double what it costs in the states but yet they want a receipt and everything legal? JAJAJAJAJAJAJAAAAAAAAAA

If they want it all legal then their patriatism is gonna cost them. Most are not ready to be so patriotic when it comes time to open the purse. Course they want the cheap and the receipt. To me people who bypass the corrupt system to provide a goods or service is more patriotic because they are helping the consumer keep more money in their pockets to buy more goods and employ someone else. When I start seeing all the tax money from apartments and cars going to work for the people who pay them I will change that opinion I guess.

[Don Gringo]

What is even harder to do in Colombia is compete with the larger importer to Colombia which is the money launderers. Who buy shit and pay all the taxes everything legal and then sell the shit at a loss just to launder the money. Playing by the rules in that system is a sure way to put you out of business in retail anyway.

So either way you are supporting a corrupt system if you run a retail business here. You are either buying on the cheap from the narcos who are laundering money and selling the imported legal goods at a loss OR you are importing them illegal and the cost is about what you can buy from the narcos for OR you are doing everything by the book and go out of business on your first day. So you are either corrupt or out of business? Corrupt is better.
I suppose service oriented businesses can be more legit and since labor is so cheap make up the difference. But retail?

[Rubito]

In other words, it's the same as in any other country :P

Don Gringo said:

What is even harder to do in Colombia is compete with the larger importer to Colombia which is the money launderers. Who buy shit and pay all the taxes everything legal and then sell the shit at a loss just to launder the money. Playing by the rules in that system is a sure way to put you out of business in retail anyway.

So either way you are supporting a corrupt system if you run a retail business here. You are either buying on the cheap from the narcos who are laundering money and selling the imported legal goods at a loss OR you are importing them illegal and the cost is about what you can buy from the narcos for OR you are doing everything by the book and go out of business on your first day. So you are either corrupt or out of business? Corrupt is better.
I suppose service oriented businesses can be more legit and since labor is so cheap make up the difference. But retail?

[Don Gringo]

Yea pretty much. jaja