WHAT IS THE PURPOSE OF THE LAW?
To promote the development of local governments by strengthening the Municipal Compensation Fund (FONCOMUN), ensuring the sustainable development of remote areas of the country through a gradual increase in the IPM.
WHAT ARE THE MAIN CHANGES?
1. Increase in the Municipal Promotion Tax (IPM) to increase the resources of the Municipal Compensation Fund (FONCOMUN):
- It will be gradually increased until it reaches 2%.
Increase Schedule
| Fiscal Year | Percentage increase per period | Distribution in IGV and IPM |
|---|---|---|
| 2026 | 0.5% | IGV: 15.5% + IPM: 2.5% |
| 2027 | 0.5% | IGV: 15% + IPM: 3% |
| 2028 | 0.5% | IGV: 14.5% + IPM: 3.5% |
| 2029 | 0.5% | IGV: 14% + IPM: 4% |
2. Gradual reduction of the VAT rate from 16% to 14%. Consequently, the effective VAT rate of 18% remains unchanged; only the percentages between VAT and IPM are redistributed, as shown in the increase schedule table.
WHEN DOES IT TAKE EFFECT?
The changes will take effect on January 1, 2026, and will be implemented GRADUALLY from 2026 to 2029 to reach a rate of 4% for the IPM and 14% for the IGV.
PLEASE NOTE!
There is no increase in the tax burden for consumers, users, or companies because the effective rate of 18% does not change and will therefore continue to be recorded by suppliers on receipts and invoices.