The Colombian Congress is studying the possibility of enacting a law which grants benefits to all who help in rebuilding the zone affected by the earthquake of January 25, 1999.
This law basically looks to rebuild the economy of the coffee growing area, through the creation of new businesses, and investment in existing ones, which generate employment for the region.
Previous experience in this type of laws leads us to believe that the benefits may assume one of the following forms:
- 1. Tax benefits, such as exemptions in income tax, and value added tax.
- 2. Customs benefits, such as reduced tariffs for imports into this region of raw materials, machinery and equipment.
- 3. Special rules to generate employment such as different contractual conditions and rules regarding benefits.
- 4. Special lines of credit.
The background on this kind of legislation is:
1. Law 44 enacted in 1986, named Ley del Ruiz, issued as a consequence of the of the Ruiz volcano lahar, which destroyed an important agricultural region in the Tolima Department.
By 1986 800 new businesses had been created, and an important textile industry sprung up, which has generated 20.000 jobs.
2. Law 218 enacted in 1995, named Ley Paez, issued as a consequence of an avalanche and flooding of the Paez River.
In 1998, 900 businesses registered for benefits under this law. This Law has generated 3.149 jobs in new businesses, as well the jobs in businesses now thriving under the new prosperity.
On March 16, 1999, the Colombian Congress will begin their legislative meetings; project of law number 172, which contains the above mentioned benefits, is already registered with the Secretary of the Congress, which means discussions should begin at that time.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
