Core Viewpoint - The Colombian government plans to increase alcohol consumption taxes as part of a new tax reform, significantly raising the tax rates on spirits and wine, which may impact the alcohol market and encourage illegal trade [1] Tax Changes - The tax rate on spirits and aperitifs will rise from 342 pesos (approximately $0.08) to 750 pesos (approximately $0.19) per 750 milliliters, representing a 120% increase [1] - The tax on wine will increase from 231 pesos (approximately $0.06) to 750 pesos (approximately $0.19), marking a 224% increase [1] Fiscal Impact - Colombia ranks among the highest globally in terms of spirits tax burden, with alcohol taxes being a significant source of revenue for various provinces [1] - In regions such as Antioquia, Cundinamarca, Caldas, Valle del Cauca, and Tolima, alcohol tax revenue accounts for 20% to 30% of local fiscal income [1] Market Concerns - Industry experts warn that the proposed tax increases could disrupt the import, distribution, and sales systems of alcoholic beverages [1] - The high tax burden may lead to a rise in the illegal alcohol market, which currently constitutes about 22% of the total alcohol supply in Colombia, potentially increasing to 50% post-reform [1] - Experts indicate that excessive taxation in the context of weak regulation could exacerbate smuggling and the proliferation of counterfeit alcohol [1]