At the beginning of the year 2021, the National Congress began the discussion of the constitutional amendment project that sought to incorporate, “for a single time”, the so-called “tax on the super-rich” in order to finance expenses associated with COVID-19. This constitutional reform did not prosper.
Notwithstanding the above, and despite the fact that the Executive Branch has exclusive legal initiative in tax matters (i.e., members of Congress are not empowered to propose the creation of new taxes), the subject was discussed again within the framework of the, at the time, bill that pursued to reduce or eliminate tax exemptions for the purpose of financing the “Universal Guaranteed Pension (Pensión Garantizada Universal)”.
Originally, the referred bill included, among other things, the implementation of an annual wealth-tax on individuals (considering as such, also, their relatives, i.e., spouse, civil partner and unemancipated children) owning assets over 5 million US dollars. However, after it became a Law, only remained, related to this matter, a 2% annual tax on the current market value of certain vehicles, such as helicopters, airplanes, yachts, provided that their market value exceeds 122 UTA (Unidad Tributaria Anual – Annual Tax Units, i.e., approximately US$ 99,430); and automobiles, as long as their market value exceeds 62 UTA (approx. US$ 50.508).
Nevertheless, as the aforementioned legal discussions showed, the wealth-tax is still one of the most discussed issues in our tax legislation.