1996 LAW 345

(December 27)

Official Journal No. 42,951 of 31 December 1996

By which the National Government is authorized for the issuance of internal public debt bonds and other provisions are issued.

THE CONGRESS OF COLOMBIA,

DECRETA:

ARTICLE 1o. BONOS FOR SECURITY. The National Government is authorized to issue domestic debt, up to the sum of 600 billion pesos, denominated as security bonds. This operation does not affect the quota of debt authorized to the National Government in accordance with the laws in force.

Security Bonds are securities to order, will have a term of five (5) years and will earn an annual return equal to 80% of the DANE certified average income variation to the consumer. The total value of the capital shall be paid on the date of redemption of the title and the interest shall be recognised annually. The conditions for the issuance and placement of the securities will be established by the National Government.

ARTICLE 2o. REDEMPTION. The Bonds shall be redeemed from the date of their maturity by their nominal value in money and may be used for the payment of taxes, advances, retentions, interests and penalties administered by the Directorate of Taxation and National Customs, as well as the interest caused, which will be paid annually.

ARTICLE 3o. FORCED INVESTMENT. Natural persons whose liquid assets exceed one hundred and fifty million pesos ($150,000,000) must carry out for one time a forced investment that will be settled and paid in 1997, in Bonds for Security, equivalent to half a percentage (0.5%) of the said assets as at 31 December 1996.

Legal persons will have to carry out for once a forced investment that will be settled and paid in 1997, in Bonds for Security, equivalent to half percent (0.5%) of the liquid assets as determined at December 31, 1996.

For the investment calculation in this article, the liquid patrimony shall be deducted from the proportion that within the gross patrimony corresponds to the goods represented in shares, contributions in voluntary companies and contributions, and compulsory for public and private funds for old-age and invalidity pensions.

PARAGRAFO 1o. They are not required to make the investment that is covered by this article by non-taxpayers of income tax and complementary, special tax rate taxpayers and entities (a) official and joint-economy companies of public services domiciled, mass transit, official liquor industries, lotteries of the territorial order and the official entities and mixed-economy companies developing the activities (a) to be exempt from this Regulation, as defined in Law 142 of 1994; the joint-economy companies must have an official participation of not less than 50%.

PARAGRAFO 2o. People who have a liquid heritage less than $150,000,000 can voluntarily subscribe to "Security Bonds".

ARTICLE 4. EFFECTS ON INCOME TAX. The losses incurred in the disposal of the Security Bonds shall not be deductible in the income tax and supplementary.

The value of the Bonds as long as the investment is maintained will be excluded from the base equity of presumptive income. Yields originating in bonds shall be considered as non-constitutive income.

ARTICLE 5o. INTEREST ON ARREARS. Persons who are required to invest in the Security Bonds that the previous article deals with that do not make the investment in a timely manner, or perform it for a sum less than due, shall cancel moratoria interest at the same rate as provided for the payment of tax obligations of the national order, on the amounts left to invest, from the date on which the time limit for the investment expired until the date on which it was made indeed.

ARTICLE 6o. CONTROL. For the control of the forced investment in this Law, the Minister of Finance and Public Credit will have the powers of investigation, determination, discussion and recovery provided for in the tax statute, and may execute by the investment and the interest established in the previous article to those who do not perform it, do so in an extemporaneous manner, or perform it for a sum less than that calculated as set out in the third article of this law.

Against the act that determines the amount of the investment, only the Resource of Replenishment proceeds, which must be decided within 5 days after its interposition.

The power of this article may be delegated to the entities assigned to the Ministry of Finance and Public Credit.

ARTICLE 7o. FOLLOW-UP COMMISSION. Create a Defense Spending Rationalization Commission, which is responsible for monitoring and ensuring that the assigned budget, with the resources from the present law, is efficiently complied with, National Defense, which will be made up of two (2) Senators and two (2) Representatives appointed by the respective Ministry of the Tercera Committees; the Budget Director of the Ministry of Finance; the Director of Planning of the Ministry of Defense.

The Commission will report on the investment of the resources in this Law.

ARTICLE 8o. VALIDITY. This Law governs from the date of its publication and repeals the rules that are contrary to it.

The President of the honorable Senate of the Republic,

LUIS FERNANDO LONDONO CAPURRO.

The Secretary General of the honorable Senate of the Republic,

PEDRO PUMAREJO VEGA.

The President of the honorable House of Representatives,

GIOVANNI LAMBOGLIA MAZZILLI.

The Secretary General of the honorable House of Representatives,

DIEGO VIVAS TAFUR.

COLOMBIA-NATIONAL GOVERNMENT

Publish and execute.

Dada en Santa Fe de Bogota, D.C., at 27 December 1996.

ERNESTO SAMPER PIZANO.

The Minister of Finance and Public Credit,

JOSE ANTONIO OCAMPO GAVIRIA.

The Minister of National Defense,

JOHN CARLOS ESGUERRA PORTOCARRERO