TITLE XII CONCERNING THE ECONOMIC AND FINANCIAL REGIME
CHAPTER 1 CONCERNING GENERAL PROVISIONSArticle 332
The state is the owner of the subsoil and of the natural, nonrenewable resources, without prejudice to the rights acquired and established in accordance with prior laws.Article 333
Economic activity and private initiative must not be impeded within the limits of the public good. No one may require permits or licenses to exercise economic activity except when authorized by law. Free economic competition is a right of every person which entails responsibilities.
The enterprise, as a basis of development, has a social function that implies obligations. The state will strengthen cooperative organizations and stimulate business development. The state, by means of the law, will prevent impediments to or restrictions of economic freedom and will curb or control any abuses caused by individuals or enterprises due to their dominant position in the national marketplace.
The law will limit the scope of economic freedom when the social interest, the environment, and the cultural patrimony of the nation require it.Article 334
The general management of the economy is the responsibility of the state. By means of the law, the state will intervene in the exploitation of natural resources, land use, the production, distribution, use, and consumption of goods, and in public and private services in order to streamline the economy with the purpose of achieving an improved quality of life for the inhabitants, the equitable distribution of opportunities, and the benefits of development and conservation of a healthy environment.
The state will make a special effort to ensure full employment and to ascertain that all individuals, especially those of low income, may have effective access to basic goods and services, and to promote productivity and competitiveness and the harmonious development of the regions.Article 335
Financial activities, the stock exchange, insurance, and any other activities related to the handling, exploitation, and investment of the resources referred to in letter (d) of paragraph No. 19 of Article 150 are of public interest and may only be exercised following the prior authorization of the state, in accordance with the law, which will regulate the government's form of intervention in these areas and promote the equitable distribution of credit.Article 336
No monopoly may be established except through the free reign of the forces of the marketplace, with the object of public or social interest, and in accordance with the law.
The law which establishes a monopoly may not be applied to those individuals who by virtue of it must relinquish the pursuit of a legal economic activity, without their full indemnification.
The organization, administration, control, and exploitation of financial monopolies will be subject to a specific regime, as determined by a law presented by the government.
Revenues obtained from monopolies of games of chance will be assigned exclusively to public health services. Revenues obtained from the liquor monopoly will be assigned on a preferential basis to health services and education.
Tax evasion with respect to revenues originating from financial monopolies will be sanctioned as a crime within the limits established by law. The government will sell or liquidate the monopolistic enterprises of the state and transfer their operation to third parties when the requirements of efficiency are not met within the limits established by law. In all cases the fights acquired by the workers will be respected.Article 337
The law may establish for the border regions, whether on land or sea, special regulations in economic and social matters tending to promote their development.Article 338
In peacetime only the Congress, departmental assemblies, and district and municipal councils may levy fiscal or fiscal-type dues. The law, ordinances, and resolutions must directly determine active and passive earnings, the events and bases that are taxable, and the rates of the levies.
The law, ordinances, and resolutions may permit the authorities to determine the rate of taxes and levies that are collected from taxpayers as a recovery of the cost of the services which the authorities provide, or as participation in the benefits that the taxpayers receive; but the system and the method to define such costs and benefits and the manner of allocating them must be determined by law, ordinances, or resolutions.
The laws, ordinances, or resolutions that regulate levies based on taxable events occurring during a specific period may not be applied except following the date when the respective law, ordinance, or resolution entered into effect.
CHAPTER 2 CONCERNING DEVELOPMENT PLANSArticle 339
There will be a National Development Plan consisting of a general plan and a plan of investments of the national public entities. The general plan will include long-term national purposes and objectives, the goals and priorities of intermediate-term state activities, and the strategies and general orientation of economic, social, and environmental policy to be adopted by the government.
The public investment plan will deal with the multi-year budgets of the main programs and plans of national public investment and specify the financial resources required for their execution.
The territorial entities will elaborate and adopt in a coordinated manner development, plans with the national government with the purpose of securing the efficient use of their resources and the adequate execution of the functions assigned to them by the Constitution and the law. The plans of the territorial entities will consist of a strategic plan and an intermediate- and short-term plan of investments.Article 340
There will be a National Planning Council made up of the representatives of the territorial entities and of the economic, social, ecological, community, and cultural sectors.
The Council will have a consultative character and will serve as a forum for the discussion of the National Development Plan. The members of the National Council will be designated by the President of the Republic from lists presented to him/her by the authorities and organizations of the entities and sectors referred to in the previous clause, and who will have to be or will have been involved in the above-noted activities.
Their term will be of eight years, and each four years the Council will be replaced in part in the form established by law. In the territorial entities there will also be planning councils, in accordance with the law. The National Council and the territorial planning councils constitute the National Planning System.Article 341
The government will elaborate the National Development Plan with the active participation of the planning authorities, the territorial entities, and the Superior Council of the Judicature and will submit the corresponding plan to review by the National Planning Council; after listening is the opinion of the Council it will proceed to effect those amendments that it considers appropriate and will present the plan to Congress within six months following the initiation of the respective presidential term.
Based on the report that the joint committees of economic affairs draw up, each group will discuss and evaluate the plan in plenary session. Disagreements about the content of the general part, if there are any, will not prevent the government from executing the proposed policies in matters falling under its jurisdiction. However, should the government decide to amend the general part of the plan, it must follow the procedure indicated in the article that follows.
The National Investment Plan will be issued by means of a law which will take precedence over other laws; consequently, its dictates will constitute mechanisms sufficient for its execution and will supplant existing ones without the need for issuing further laws. Nevertheless, in the annual budgetary laws it will be possible to increase or decrease the shares and resources approved in the planning law.
If Congress does not approve the National Public Investment Plan within three months following its presentation, the government may pass it by a decree having the force of law. The Congress may modify the National Public Investment Plan provided the financial balance is maintained. Any increment in authorizations of indebtedness requested in the governmental plan or the inclusion of investment plans not contemplated in it require the approval of the national government.Article 342
The corresponding organic law will regulate the drafting, approval, and execution of the development plans and will provide the appropriate mechanisms for the harmonization and alignment of the official budgets with them. It will also determine the organization and functions of the National Planning Council and of the territorial councils, as well as procedures to allow citizens' participation in the discussion of the development plans and the subsequent modifications, in accordance with what is established in the Constitution.Article 343
The national planning entity stipulated in the law will be responsible for the planning and organization of the systems for the evaluation of the management and performance of the public administration, regarding both policy and investment plans, under the terms that it dictates.Article 344
The departmental planning organs will evaluate the management and performance of the planning, development, and investment programs of the departments and municipalities and will participate in the preparation of the budgets of the latter within the limits stipulated by the law. In each case, the national planning organ may, in a selective manner, carry out the evaluation of any territorial entity.
CHAPTER 3 CONCERNING THE BUDGETArticle 345
In peacetime, the collection of levies or taxes that are not included in the revenues budget and payments from Treasury funds which are not included in the expenditures budget are prohibited. Nor may any public expenditure be incurred that has not been decreed by Congress, the departmental assemblies, or the district or municipal councils, or any credit transferred which is not projected in the respective budget.Article 346
The government will formulate annually the Revenues Budget and Appropriations Law, which must harmonize with the National Development Plan, and will present it to Congress within the first 10 days of each legislature.
The Appropriations Law may not make any stipulation whatsoever that does not correspond to a legally recognized credit, an expenditure decreed in accordance with an earlier law, or a government budget which provides for the operation of the branches of government, the servicing of the debt, or the implementation of the National Development Plan.
The economic committees of the two chambers will deliberate jointly for the first reading of the proposed Revenues Budget and Appropriations Law.Article 347
The appropriations bill must include all the expenditures which the state plans to implement during the relevant fiscal period. If the legally authorized revenues are not sufficient to cover the projected expenditures, the government will propose separately, before the same committees that are considering the budget bill, the creation of new revenues or the modification of existing ones to finance the contemplated aggregate expenditures.
The budget may be approved without debate having been closed regarding additional revenues, and discussion of this may continue in the subsequent legislative term.Article 348
If Congress does not approve the budget, the one presented by the government will apply according to the preceding article; should the budget not be presented within the deadline, that of the previous year will apply, but the government may reduce expenditures and consequently eliminate or reduce jobs when the calculations of the revenues of the new fiscal year require it.Article 349
During the first three months of each legislature and strictly in accordance with the rules of the Organic Law, the Congress will debate and issue the General Revenues Budget and Appropriations Law.
Estimates of revenues, credit resources, and proceeds of the Treasury balance may not be increased by Congress except following consideration and favorable endorsement by the appropriate minister.Article 350
The Appropriations Law must include a component entitled public social expenditure that will consolidate the parts dealing with public social expenditure according to the definition made by the respective organic law. Except in case of foreign war or for reasons of national security, public social expenditure will have priority over any other allocation.
In the territorial distribution of the public social expenditures, these factors will be taken into account the number of individuals with unsatisfied basic needs, the population and fiscal administrative efficiency, according to the regulations mandated by the law. The investment budget may not be reduced proportionately compared to the earlier year with respect to the local expenditure of the corresponding Appropriation's Law.Article 351
The Congress may not increase any of the sections of the estimated budgetary expenditures proposed by the government or include a new section except with the written consent of the appropriate minister.
The Congress may eliminate or reduce parts of the expenditures proposed by the government with the exception of those needed for the servicing of the public debt, the other contractual obligations of the state, integral funding of the ordinary services of the administration, and the investments authorized in the plans and programs referred to in Article 341.
Should the computation of revenues increase or should some of the parts of the respective estimate be eliminated, the amounts made available in this manner, without exceeding their aggregate, may be applied to other investments or authorized outlays in accordance with what is prescribed in the final clause of Article 349 of the Constitution.Article 352
In addition to what is mentioned in this Constitution, the Organic Law of the Budget will regulate matters corresponding to the programming, approval, modification, and execution of the budgets of the nation, of the territorial entities, and those decentralized entities of any administrative level and their coordination with the National Development Plan as well as the capacity of the organs and state entities to enter into contracts.Article 353
The principles and provisions established in this title will apply, where they are pertinent, to the territorial entities for the elaboration, approval, and execution of their budget.Article 354
There will be a General Accountant, an official of the executive branch, who will be responsible for the general accounting of the nation and for consolidating the general accounting with that of its decentralized territorial or service entities at various levels, except for the execution of the budget, over which the Office of the Comptroller General has jurisdiction.
The functions of streamlining, centralizing, and consolidating the public accounting system, calculating the general balance, and determining the accounting principles that must apply in the country, in accordance with the law, are the responsibility of the General Accountant.
Six months following the close of the fiscal year, the national government will send Congress the budgetary balance, audited by the Office of the Comptroller General of the Republic, for its information and analysis.Article 355
None of the branches or organs of government may decree subsides or grants to individuals or legal entities in the private sector.
At the national, departmental, district, and municipal levels, the government may, with the resources of the respective budgets, sign contracts with nonprofit private entities and with the recognized capacity to promote programs and activities of public interest, in accordance with the National Plan and the sectional development plans. The national government will regulate the matter.
CHAPTER 4 CONCERNING THE DISTRIBUTION OF RESOURCES AND JURISDICTIONSArticle 356
Except for what the Constitution and the law provide, the government will determine the services for which the nation and territorial entities are responsible.
Similarly, it will determine the fiscal revenues, that is, the percentage of the nation's current revenues to be transferred to the departments, the capital district, and the special districts of Cartagena and Santa Marta directly or through the municipalities, for the services that are assigned to them. The fiscal revenues will be assigned to finance the preschool, primary, secondary, and intermediate education and public health services at the levels that the law mandates, with special attention to children.
The fiscal revenues will increase yearly until they reach a percentage of the current revenues of the nation that make it possible to adequately cover the services for which they are designated. With this purpose, retention of the sales tax and all the other resources which the nation transfers directly to cover expenditures at the above-mentioned levels of education will be included in them.
The law will determine the deadlines for the transfer of these revenues and the redistribution of the corresponding obligations, will establish the conditions under which each department will assume responsibility for the stated services, and may authorize the municipalities to provide such services directly in individual or collective form. It will not be possible to decentralize responsibilities without the prior allocation of fiscal resources adequate to cover them. Some 15 percent of the fiscal revenues will be distributed in equal shares among the departments, the capital district, and the districts of Cartagena and Santa Marta.
The balance will be allocated in proportion to the number of actual and potential users of the services mentioned, taking into account, additionally, the fiscal contribution involved and the administrative efficiency of the respective territorial entity. Every five years the law, at the initiative of the members of Congress, may revise these percentages of distribution.Article 357
The municipalities will have a share in the current revenues of the nation. The law, at the initiative of the government, will determine the minimal percentage of such shares and will define the priority areas of social investment that will be funded out of said resources.
For the purposes of this revenue sharing, the law will consider the indigenous (Indian) reservations as municipalities. The resources represented by such revenue sharing will be distributed by the law in accordance with the following criteria 60 percent in direct proportion to the number of inhabitants below the poverty level or with unsatisfied basic needs, and the rest as a function of the total population, fiscal and administrative efficiency, and the progress demonstrated in the citizens' quality of life.
The law will specify the scope, the criteria of distribution anticipated here, and will provide that a percentage of these revenues be invested in the rural areas.
Every five years the law, at the initiative of Congress, may revise these percentages of distribution.
The share of the municipalities in the current revenues of the nation will be increased, year by year, from 14 percent in 1993 to a minimum of 22 percent in 2002.
The law will determine the gradual increase of these transfers and will define the new responsibilities which the municipalities will assume in the field of social investment and the conditions for their implementation. Their authorities will have to demonstrate to the organs of performance evaluation mid control the efficient and proper use of these resources and, in the case of poor management, the sanctions established by the law will be applied.
Excluded from the revenue sharing mentioned above will be new taxes when Congress so determines and, for the first year in force, adjustments to existing taxes and savings made through emergency cutbacks.Article 358
For the purposes of the two preceding articles, current revenues are to be understood as those constituted by tax and non tax revenues, with the exception of capital revenues.Article 359
No national revenues will be specifically assigned. Excepted are the following:
- The shares provided in the Constitution for the benefit of the departments, districts, and municipalities.
- Those assigned to social investment.
- Those which, based on the earlier laws, the nation assigns to social service entities and to former intendancies and police districts.
The law will determine the conditions for the exploitation of nonrenewable natural resources as well as the rights of the territorial entities over them.
The exploitation of a nonrenewable natural resource will produce in favor of the state an economic revenue privilege without prejudice to any other right or compensation that may be contracted. The departments and municipalities in whose territory nonrenewable natural resources are exploited as well as maritime and river ports through which said resources or derivative products are shipped will be entitled to participate in the grants and compensations.Article 361
With revenues originating from grants that are not allocated to departments and municipalities, a National Endowment Fund will be created whose resources will be assigned to the territorial entities within the limits stipulated by the law. These funds will be applied to the promotion of mining, the preservation of the environment, and to financing regional projects of investment identified as having priority in the development plans of the respective territorial entities.Article 362
The assets and revenues originating from taxes or other sources relating to the exploitation of monopolies of the territorial entities are their exclusive property and enjoy the same guarantees as the property and income of individuals.
Departmental and municipal taxes enjoy constitutional protection and consequently the law may not transfer them to the nation, except temporarily in the case of a foreign war.Article 363
The tax system is based on the principles of equity, efficiency, and progressiveness.
The tax laws will not be applied retroactively.Article 364
The domestic and foreign indebtedness of the nation and the territorial entities may not exceed their capacity of repayment. The law will regulate this matter.
CHAPTER 5 CONCERNING THE SOCIAL PURPOSE OF THEArticle 365
STATE AND OF THE PUBLIC SERVICES
Public services are inherent to the social purpose of the state. It is the duty of the state to ensure their efficient provision to all the inhabitants of the national territory.
Public services will be subject to the juridical regime determined by the law, may be provided by the state directly or indirectly, by organized communities, or by individuals. In any case, the state is responsible for the regulation, control, and application of such services.
If for reasons of sovereignty or social interest, the state, by means of a law approved by the majority of the members of both chambers upon the initiative of the government, should decide to assign to itself specific strategic or public service activities, it must first indemnify fully those individuals who by virtue of the said law are deprived of the exercise of a lawful activity.Article 366
The general welfare and improvement of the population quality of life are social purposes of the state. A basic objective of the state's activity will be to address unsatisfied public health, educational, environmental, and potable water needs. For this purpose, public social expenditures will have priority over any other allocation in the plans and budgets of the nation and of the territorial entities.Article 367
The law will determine the relative jurisdictions and responsibilities for domestic public services, their provision, quality, and financing, and the schedule of rates, which will take into account the following criteria cost, cooperation, and the redistribution of revenues. Domestic public services will be provided directly by each municipality when the technical and economic characteristics of the service and the general benefits of the services indicate it to be possible and advisable, and the departments provide support and coordination. The law will determine the entities competent to determine rates.Article 368
The nation, departments, districts, municipalities, and decentralized entities may grant subsidies in their respective budgets so that individuals with lower incomes may pay rates of domestic public services that cover their basic needs.Article 369
The law will determine the duties and rights of users, the regime of their protection, arid their form of participation in the management and funding of the state enterprises that provide the service. Similarly, the law will define the participation of the municipalities or their representatives in the entities and enterprises that provide domestic public services.Article 370
It is the responsibility of the President of the Republic to stipulate, subject to the law, the general policies of administration and efficiency control of domestic public services and to exercise through the Office of the Superintendent of Domestic Public Services the control, inspection, and supervision of the entities that provide them.
CHAPTER 6 CONCERNING THE CENTRAL BANKArticle 371
The Bank of the Republic will exercise the functions of a central bank. It will be organized as a legal public entity with administrative, patrimonial, and technical autonomy, subject to its own legal regime.
The following will be the basic functions of the Bank of the Republic :
- To regulate the money supply,
- international exchanges,
- and credit;
- to issue legal tender;
- to administer the international reserves;
- to be the lender of last resort and banker of the credit institutions; and to serve as the government's fiscal agent.
All these functions will be exercised in coordination with the general economic policy. The Bank will give a report to Congress on the execution of the policies for which it is responsible and on other matters requested from it.Article 372
The executive board of the Batik of the Republic will be the monetary, exchange, and credit authority, in accordance with the functions assigned to it by law. It will be responsible for managing and executing the functions of the Bank and will be made up of seven members, among them the Minister of Finance, who will chair it.
The Director of the Bank will be elected by the executive board and will be one of its members. The five other members, who may hold no other employment, will be appointed by the President of the Republic for renewable terms of four years, replacing two of the members every four years. The members of the executive board will represent the interests of the nation exclusively.
The Congress will stipulate the law which will regulate the Bank of the Republic for the exercise of its functions and the regulations under which the government will issue the statutes of the Bank.
These will determine, among other things, the form of its organization, its legal regime, the functioning of its executive board and its board of directors, the term of the director, the rules for the constitution of its reserves; including rules for exchange and monetary stabilization, and the future application of its earnings.
The President of the Republic will perform the inspection, supervision, and control of the Bank within the terms stipulated by law.Article 373
The state, through the intermediary of the Bank of the Republic, will supervise the maintenance of the purchasing power of the currency.
The Bank may not establish credit quotas nor give guarantees for the benefit of individuals except when it involves foreign credit to be distributed through credit institutions for temporary support for the liquidity of credit institutions. Financing operations for the benefit of the state require the unanimous approval of the executive board unless open market operations are involved. In no case may the legislature mandate credit quotas for the benefit of the state or individuals.