...High Corporate Tax Burden: Colombian corporates cash flows will continue to be pressured by rising taxes as the government seeks to offset declines in tax revenues from the oil sector. Currently, the top nominal rate is 39%, while the effective tax rate for many issuers is in excess of 60%. Fitch Ratings believes the top nominal rate could climb to between 43% and 47% in the next two years as the government seeks ways to close its fiscal gap. No Improvement in Sight: The pressure for higher corporate taxes will not abate until oil prices improve or the government expands its tax base so that taxes represent more than 14% of GDP. During the last three years, about 20% of the nation's revenues have been linked to the oil industry. Reductions in oil prices and lower volumes have pressured the central government's budget. Revenues from the oil sector are expected to be COP9.6 trillion in 2015, which includes income taxes and dividends from Ecopetrol S.A. (Ecopetrol), and then fall to COP3.3...
