Hospitals issue alert over decree bringing forward withholding tax collection to 2026 and ask to be excluded

After the Government, headed by the Ministry of Finance, issued Decree 552, which brings forward the collection of withholding tax on corporate income tax from 2026 to this year , the response from various sectors has not been long in coming.

The most recent case is that of the health sector, which is already facing a difficult situation due to liquidity difficulties in the healthcare service provider sector. In a letter addressed to the Minister of Health, Guillermo Alfonso Jaramillo, the Colombian Association of Hospitals and Clinics stated that these entities are unable to comply with this advance payment of the straight-line tax.

"Recently issued Decree 572 of 2025, aside from the intended collections, must take into account that the IPSs do not have sufficient cash flow or liquidity to allow them to comply with the advance payment of withholdings and income tax, nor with any rate increases ," the communication reads.

And he adds: "We believe, Mr. Minister, that in times of economic hardship, a sector like the health sector, with service providers struggling to maintain their operations, is, to say the least, inappropriate and unfair to equate them with other productive sectors or companies in the country."

Thus, the country's clinics and hospitals asked Jaramillo to intervene with the Treasury Department to " correct this measure by excluding service providers from these advance tax collections and rate adjustments, allowing them to continue under current conditions. We also urge that liquidity issues be addressed comprehensively and that relief be provided to the healthcare sector, which is ultimately the one that keeps the doors open to users."

The decree seeks to advance the collection of the 2026 income tax withholding tax, which can be paid starting this year. According to the government, this measure seeks to "facilitate, accelerate, and guarantee the collection of income tax," according to the document.

However, from the moment it was announced, the decree received all kinds of criticism and questions. While bringing forward the collection could somehow balance the state's coffers for this year by increasing revenue, it would open a fiscal gap for 2026 (since the withholding would no longer be applied for that fiscal year).

One of the most vocal critics of the measure so far is Bruce Mac Master, president of the Andi: "Companies will pay taxes in 2025 that will be far higher than those permitted by current regulations. The government will spend the resources earmarked for 2026 in 2025. That year, the government will be defunded, forcing companies to take on debt. This change in the rules is detrimental to economic activity and investment."

But he wasn't the only one to speak out on the matter. The Trade Council also spoke out, pointing out that this would be a severe blow to the cash flow of companies, as well as independent workers and small businesses.

This is what the association that represents the country's main unions stated a few days ago, before the decree was officially issued: "The measure directly affects consumption, savings, and investment, fundamental pillars for economic growth and formalization. In practice, it is a hidden tax reform that shifts the burden onto those who comply, produce, and generate income."

For his part, Luis Eduardo Llinás, director of the Dian , had explained to this media a few weeks ago that the higher withholding taxes in 2025 would translate into lower balances to pay and advances for 2026.

" We expect a total collection of 7.38 trillion pesos. These increases will only apply to those economic activities whose withholding taxes are still lower than the tax they owe. These were identified through data analytics on income and withholding information for the years 2023 and 2024," he stated.

For José Manuel Restrepo, former Minister of Finance and current rector of EIA University, this is a covert tax reform that advances revenue at the expense of businesses' cash flow. "It squeezes their liquidity, forces them into debt, and puts jobs at risk. "It's swindling the money from 2026 and putting micro and small businesses in debt today," he declared.

MATEO CHACÓN ORDUZ | Life Subeditor