Subnational governments play a central role in tax mobilisation in Colombia. Local revenues rely primarily on taxes on goods and services and on property taxation, with recurrent taxes on immovable property reaching levels comparable to the OECD average. Bogotá is the country’s largest local tax collector, with taxes accounting for over 60% of its total revenues, mainly from the Industry and Commerce Tax (ICA) and property taxes. The city’s tax collections have grown steadily, reaching 3.4% of its GDP in 2024. While ICA revenues have shown moderate fluctuations, property and motor vehicle taxes have followed a consistent upward trend. Bogotá collects a relatively high level of tax revenue compared to other municipalities, underscoring its strong fiscal capacity and the pivotal role of its tax system in supporting local development.
Reconnecting Bogotá
Abstract
Subnational governments in Colombia account for a significant share of total tax revenues compared to other countries in the region. In 2023, Colombia ranked among the highest in the LAC region, with local governments accounting for 11.5% and departmental governments1 for 4.3% of total tax revenues (Figure 2.1). This places Colombia just behind federal countries such as Brazil, where state governments represent 23.0% and local governments 6.4% of total tax revenues, and Argentina, where provincial governments account for 18.2%. In the rest of the LAC region, the share of subnational tax revenue in total public revenue remained below 9.0% (OECD et al., 2025[1]).
Note: The data exclude local government revenues for Antigua and Barbuda, Argentina (though provincial revenues are included), The Bahamas, Barbados, Cuba, the Dominican Republic, Saint Lucia, Trinidad and Tobago, and Venezuela, as such data are not available. Local government revenue data have been available since 1991 for Nicaragua, 1994 for Bolivia, 1995 for Guatemala, 1998 for Jamaica, 1999 for Panama, 2000 for Peru, 2002 for El Salvador and Guyana, 2006 for Paraguay, and since 1990 for all other countries. In the case of Colombia, state government revenues correspond to those collected by departments, which are separate from those of local municipalities.
Source: (OECD et al., 2025[1]).
Taxes on goods and services and property taxes2 are the main sources of subnational tax revenue in Colombia and across the LAC region, in contrast to OECD countries, where subnational governments have access to a much broader range of tax bases. In 2023, taxes on goods and services accounted for 49% of total subnational tax revenues in Colombia, primarily consisting of specific taxes and the Industry and Commerce Tax (ICA), followed by property tax revenues, which represented 21% (Figure 2.2). In Latin America and the Caribbean, tax bases vary – from economies relying primarily on taxes on goods and services to those depending mainly on property taxes. In OECD countries, subnational governments typically have access to a wider variety of tax instruments. A substantial portion of subnational revenue in these countries comes from taxes on income and profits, which on average represent more than one-third of total subnational tax collections (OECD et al., 2024[2]).
Note: Figures exclude local government revenues for Argentina but include provincial revenues. Data for Ecuador, Nicaragua, Panama and Uruguay are estimated for 2022. OECD average corresponds to 2022 and includes local government revenues.
Source: (OECD et al., 2025[1]).
Recurrent taxes on immovable property collected at the local level in Colombia are among the highest in LAC, having reached the same level as OECD economies in 2020. Recurrent taxes on immovable property are a form of property taxation, alongside recurrent taxes on net wealth and inheritance. In 2023, recurrent taxes on immovable property collected at the local level in Colombia represented 0.70% of GDP, compared with 0.90% in the OECD and above the LAC average of 0.34% (Figure 2.3). In 2020, Colombia reached 0.91% of GDP, nearly matching the OECD average of 0.92%. Since 2014, Colombia’s subnational governments had led the LAC region in recurrent taxes on immovable property until 2021, when they were surpassed by the local governments of Uruguay and Chile.
Note: The OECD average corresponds to the 2022 average due to data availability as of this date.
Source: (OECD et al., 2025[1]).
Other tax revenue sources for Colombia include environmental taxes, with a significant focus on energy-related taxes, mostly on fuel (OECD et al., 2024[3]). Colombia’s average environmentally related tax revenues (ERTR) stood at 0.6%, with energy-based taxes representing the majority at 0.41% and transport taxes at 0.18%. This figure is below the LAC average of 0.9% of GDP and considerably lower than the OECD average of 1.8% of GDP (Figure 2.4). ERTRs vary greatly, from Costa Rica with 2% of GDP to Belize with 0.1%.
Various environmental taxes have been implemented across Colombia in different levels of government, targeting energy, transport, pollution, and natural resources. In the energy sector, departmental governments administer the petrol and diesel surcharges, while the national government manages electric sector transfers, the tax on diesel and petrol, and the carbon tax. For transport, the tax on motor vehicle ownership is a national tax ceded to the departments and to Bogotá, while the motor vehicle purchase tax is a purely national-level tax. Pollution-related taxes are administered at different levels: discharge fees are managed by both local and national authorities, while the tax on plastic bags is national, and the tax on discharges to water is local or city-level. Lastly, resource-based taxes include mixed local and national administration for the tax on forestry products, local oversight for the forestry fee, and national administration for mining royalties.
Note: The LAC average represents the unweighted average of 24 LAC countries and excludes Argentina, Cuba and Venezuela due to data issues. The figure does not include Jamaica’s revenues from the special consumption tax on petroleum products (estimated to be more than 2.0% of GDP in 2018) as the data are not available. The OECD average represents the unweighted average of 37 OECD member countries.
Source: (OECD et al., 2025[1]).
Taxes are the main source of revenue in Bogotá. Taxes account for over 60% of Bogotá’s total revenues, making them the city’s primary source of income. The remaining revenue comes from current and capital transfers, as well as other non-tax income. The two largest contributors to the city’s tax base are recurrent taxes on immovable property and the Industry and Commerce Tax (ICA), which together generate the bulk of local tax revenue.
Tax revenues in Bogotá have been increasing. Since 2005, tax revenues as a share of the city’s and the national GDP have shown a stable upward trend, reaching 3.4% of Bogotá’s GDP in 2024 and 0.9% of Colombia’s GDP in 2023 (Figure 2.5, Panel A). Over the period from 2011 to 2024, ICA revenues showed moderate fluctuations, with a noticeable rise in the early 2020s followed by a decline (Figure 2.5, Panel B). Property tax revenues increased until 2019; although growth slowed thereafter, the overall trend remained upward. Meanwhile, motor vehicle tax revenues exhibited greater volatility, experiencing declines in 2012, 2015, 2021, and 2022, but these decreases were generally smaller than the increases in other years, resulting in a net upward trend over the period.
Note: Panel A: Both tax revenue and GDP are presented in current prices. For Colombia’s GDP, figures were taken from the OECD Economic Outlook 2024, which includes data only up to 2023.
Source: Panel A: Authors’ own calculations based on (DANE, 2025[4]; OECD, 2024[5]). Panel B: (Secretaría de Hacienda de Bogotá, 2024[6]).
Bogotá collects a relatively high level of tax revenue compared to other municipalities. Bogotá's role as the country’s economic hub, combined with its unique fiscal structure, enables it to collect the largest amount of own-source tax revenue among all municipalities, even when aggregated by department. At the municipal level, Bogotá has the highest tax burden at 3.4% of departmental GDP, well above Sucre (3.3%) and Atlántico (3.0%) (Figure 2.6) (Secretaría de Hacienda de Bogotá, 2024[7]). Other departments with relatively high municipal tax pressure include Risaralda and Bolívar, while La Guajira, Arauca, and San Andrés recorded the lowest levels, pointing to more limited tax capacity.
Note: This analysis presents estimates of the municipal tax burden, grouped by department, for the period 2010–2024. The tax burden was calculated by dividing collected revenue by the departmental GDP published by DANE.
The main sources of tax revenues in Bogotá are ICA and property tax similar to the tax structure of other municipalities. In 2024, Bogotá ranked first in terms of ICA revenue, which accounted for 49% of the city’s total tax revenue, followed by Santa Marta and Barranquilla, where ICA made up 48% and 47%, respectively (Figure 2.7). Property tax in Bogotá ranked seventh, representing 32% of total tax revenue – behind the top three cities: Tunja and Pereira (both at 44%) and Bucaramanga (38%). The gasoline surcharge accounted for 3% in Bogotá, lower than in Neiva (10%) and Santa Marta (7%). Other taxes, including the motor vehicle and consumption taxes in Bogotá, as well as cigarette, tobacco, liquor, and beer taxes in other municipalities, accounted for 16% of the city’s revenues, lower than in Cúcuta (31%) and in Tunja and Cali (21%). In cities like Barranquilla, Bucaramanga, Cali, Cartagena, Pereira, and Santa Marta, these other taxes also included revenues from the public lighting tax.
Source: (DNP, 2024[8]).
Over the years, the ICA and property tax have continued to be the main contributors of tax revenues in Bogotá. The ICA accounted for 44% of total tax revenues in 2016, rising to 47% in 2022 and reaching 49% by 2024 (Secretaría de Hacienda de Bogotá, 2025[9]). Property taxes represented 35% of total revenues in 2016 and have remained relatively stable, with a decline to 31% in 2022 followed by a slight recovery to 32% in 2024. Within the category of other taxes, the motor vehicle tax accounted for 8% of total revenues in 2016 and increased modestly to 10% by 2024.
References
[4] DANE (2025), PIB total por departamentos - Precios corrientes, https://www.dane.gov.co/index.php/estadisticas-por-tema/cuentas-nacionales/cuentas-nacionales-departamentales.
[8] DNP (2024), Consolidador de Información Fiscal y Financiera Territorial (CIFFIT), Departamento de Planeación Nacional, Bogotá, https://ciffit.dnp.gov.co/ciffit/WebPages/.
[5] OECD (2024), OECD Economic Outlook No 116, https://doi.org/10.1787/d8814e8b-en.
[3] OECD et al. (2024), Latin American Economic Outlook 2024: Financing Sustainable Development, OECD Publishing, Paris, https://doi.org/10.1787/c437947f-en.
[1] OECD et al. (2025), Revenue Statistics in Latin America and the Caribbean 2025, OECD Publishing, Paris, https://doi.org/10.1787/7594fbdd-en.
[2] OECD et al. (2024), Revenue Statistics in Latin America and the Caribbean 2024, OECD Publishing, Paris, https://doi.org/10.1787/33e226ae-en.
[9] Secretaría de Hacienda de Bogotá (2025), Participación porcentual de los ingresos tributarios (internal document), Comisión de Expertos.
[7] Secretaría de Hacienda de Bogotá (2024), Ejercicio de presión fiscal (internal document), Dirección de Estadísticas y Estudios Fiscales, Secretaría Distrital de Hacienda, Bogotá D.C.
[6] Secretaría de Hacienda de Bogotá (2024), Real variation in tax revenues in Bogotá (internal document).
← 1. In Colombia, “local governments” refer to municipal authorities responsible for cities and towns, while “departmental governments” correspond to the administrative divisions above municipalities, similar to states or provinces, overseeing broader regional responsibilities.
← 2. Unless otherwise indicated, references to property tax in this publication correspond to recurrent taxes on immovable property, and the two terms are used interchangeable.