Incidence of Colombian taxes, 1970

Estimates are presented for the urban and rural sectors separately, though primary attention should focus on national totals. The estimates are based on data on the distribution of income and consumption patterns collected in several recent household budget surveys by the national statistical office (DANE) and on a variety of information on special topics (coffee, income taxes, transportation, special foreign exchange account, etc.). The bottom two-thirds of the income distribution (among households) receives only about one-fourth of household income and the top one-eighth accounts for roughly half of all income. In both the urban and rural sectors income is distributed quite unequally, but in both cases the inequality is less than for the nation as a whole. The Colombian tax system appears to exhibit a degree of progressivity ranging from rather mild to fairly strong, depending upon the assumed incidence of the corporation income tax and whether or not the coffee export duties are included in the analysis.