(Bloomberg) – Colombia’s tax agency has ruled out freezing assets belonging to Ecopetrol SA during the ongoing $3 billion VAT dispute, according to a senior official at the state oil producer.
Chief Financial Officer Camilo Barco told investors Friday that the tax agency stated “officially and specifically that it discards any asset freeze.”
Following a revised interpretation by tax agency that gasoline and diesel imports are subject to the 19% VAT rate, Ecopetrol and its Cartagena refinery are being required to pay at least 11.28 trillion pesos for the 2022 to 2024 period. The companies are disputing the claim and see a greater than 50% chance of success, according to a statement included in Ecopetrol’s third quarter earnings report.
In reply to a request for comment, the tax agency referred to its Nov. 7 statement where it said that it hasn’t begun any “coercive” process against any fuel importing company.
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The dispute comes as the nation struggles with its fragile fiscal outlook. The government recently raised its forecast for this year’s budget deficit to the equivalent of 7.1% of gross domestic product and has suspended a fiscal rule that previously limited public spending.
Ecopetrol shares jumped 4.8% in Bogota trading after the driller reported net income of 2.56 trillion pesos ($682 million) in the third quarter, beating analyst expectations.
