There is no neighborhood that does not have its small shops, its restaurants, its drugstores and, of course, its hairdressers and beauty salons with their loyal clientele for haircuts and nail care. Although they are activities in which daily livelihood is earned, the problem in many cases is that the workers do not contribute because they are on the side of the informality.
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Since 2019, small businesses can take advantage of the benefits of the simple tax regime, a mechanism offered by Dian and that provides lower rates, which are based on the income level of each entrepreneur. In addition, the tax declaration is made easier and simpler, since they can present up to 7 taxes in a single form.
Henry and his wife, Luz Farid, saw in this regime the opportunity to get on the train of formality and have been doing all the law for several years now in their hairdressing salon, located in Santa Bárbara, in the north of Bogotá.
“What caught our attention is that they asked us for several taxes in one and gave us the ease and rates according to the company’s income,” explains the hairdresser from Henry and Faridcompany that has been in the neighborhood for more than 17 years and currently has four employees.
Henry Vanegas, owner of the Henry & Farid hair salon, in Santa Bárbara in the north of Bogotá.
Mauricio Moreno/El Tiempo
In addition, he says that they are already in the era of payroll and electronic invoicing, which gives them more seriousness among their clients. “We see ourselves more formal. We think it’s a good entry into legality and for us now it’s easier to ask the bank for a loan”, says this micro-entrepreneur.
For example, because they are a hairdresser, the regime allows them not to be responsible for VAT and their rates range from 1.2 to 5.6 percent, depending on their income.
Regime advance
In the last four years, 76,272 businessmen have signed up to the simple tax regimethe system devised in the 2019 financing law that replaced the monotributo and that, with a cutoff of December 2022, collected 2.1 trillion pesos.
Of that total, more than 42,000 businesses are new taxpayers that Dian did not have on its radar. These did not have the single tax regime (RUT), and therefore it is understood that they are new establishments or that they decide to formalize their activities.
Precisely, this regime was created to encourage the generation of formal employment in micro and small companies with gross income today below 100,000 UVT, that is, 4,241 million pesos.
In the last four years, 76,272 businessmen have signed up for the simple tax regime, the system devised in the 2019 financing law that replaced the monotributo.
Of the total 76,272 businesses in the regime, 42,367 are currently legal persons and 33,905 are natural. The highest percentage of registered entrepreneurs belongs to professional, scientific and technical activities, where there are 13,678 establishments, which represents 18 percent of the total.
Then follows the item of trade and vehicle repair, where there are 13,310 registered, and in third place is manufacturing, where 6,880 businesses are recorded. For example, in construction there are already 4,964 businesses.
By places, where there are more businesses in the simple regime is in Bogota, with 26,590 registered; followed by Antioquia, which has 10,419 people, and Valle del Cauca, with 6,228. Then there are others such as Atlántico, with 4,736, and Cundinamarca, with 4,075.
Small businesses can register in the simple tax regime.
Courtesy David Rondón Arévalo.
Advance of the simple tax regime.
Infographics The Weather
Regime benefit
The micro and small companies that are part of this regime have benefits that reduce their tax burdens, facilitate and simplify compliance with obligations, as well as tools that allow them to have a better cash flow.
This is how establishments are not subject to withholdings at source for income or ICA. What is done is a single annual rate with up to seven taxes such as industry and commerce, consumption tax for the expense of food and beverages, occasional profit and firefighter surcharge.
besides, the rates that apply are lower. Depending on the different activities reported and gross income, they are between 1.8 and 8.3 percent, that is, they are much lower than those of income tax.
Likewise, this mechanism iencourage banking since 0.5 percent of the payments received by the employer through debit or credit cards or other electronic payment mechanisms are deducted from the tax payable of the simple regime.
Entrepreneurs also have reduced hiring costs because payments for employee pension contributions are deducted from the tax payable by the regime. In addition, they can deduct their tax at 4 per 1,000.
