EC - Ecopetrol CEO praises government plan to drop export tax on energy exports

Ecopetrol ( NYSE: EC ) CEO Felipe Bayon said Wednesday he welcomed the removal of a planned tax on exports of Colombian oil and coal from the government's proposed fiscal reform, in favor of a gradual profit-based surcharge.

The proposal had sought to impose an additional 5% income tax on mining and oil companies and a 20% tax on exports, part of President Gustavo Petro's efforts through Colombia's congress to raise an additional 22T pesos/year (~$4.9B) to finance social programs.

Proposed export taxes included an additional levy on coal once prices hit $86/ton and $71/bbl for oil.

The government's latest proposal shows the surcharge on the extractive sector falling from 10% in 2023 to 5% in 2025 while suggesting the elimination of export taxes.

The majority state-owned oil producer initially forecast the planned tax would cost it 4T-5T pesos, or as much as $1.1B.

Ecopetrol ( EC ) has a very cheap valuation and high yield, but political risks are high, Mike Zaccardi writes in an analysis posted recently on Seeking Alpha .

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