Orange development áreas

One of the government's banners has been to promote the development of the so-called "Orange Economy" through various benefits that were initially established in Law 1834 of 2017, promoted by the current President of the Republic Dr. Iván Duque, as he passed through Congress; then through the Financing Law and now in the National Development Plan (Law 1955 of 2019).

In relation to this last norm we want to dwell on the so-called "orange development areas -ADN". These areas are qualified as "geographical spaces that are delimited and recognized through land use planning instruments or administrative decisions of the territorial entity, which aim to encourage and strengthen cultural and creative activities provided for in Article 2° of Law 1834 of 2017[1].

The rule does not specify whether the DNAs will be located in urban areas or whether they may include rural areas, leaving the doubt even if a municipality could be considered in its entirety as an DNA. It must be taken into account that in Colombia there are municipalities in which tourism-focused activities have become the axis of urban development, which could be a criterion to determine whether the municipality qualifies as an ADN.

Notwithstanding, the areas are qualified as orange development, there is no obligation to grant the benefits derived from such qualification, since according to Article 179 of Law 1955 of 2019, the ADN may have temporary benefits in property tax, exemption of a percentage of the tax generated by the sale of real estate and exemption from urban delineation tax; which is at the discretion of the competent entities.

It is feared that this type of prerogatives, which are left to the discretion of other entities or agencies, may end up being innocuous in practice. The regulation of these benefits is subject to various interests, among which it is generally possible to identify: the fiscal impact on the territorial and national budget (depending on the benefit in question); the financial impact derived from the studies that will have to be carried out at the local level to determine which areas would be included in the DNA; the social impact of having to justify such decision from a social, technical and legal point of view; and inevitably, political interests are also at stake, considering the regulation of the form, duration and subjects to which such benefits will be applied.

If they are effectively adopted and regulated, it will be necessary for such decisions to precisely regulate all the elements of the benefit to be granted: recipients of the rule, temporality of the benefit, amount, ranges, areas, form of access, among others.

On the other hand, Article 179 of Law 1955 of 2019 establishes that the investments made in the DNAs will have the same benefit of works for taxes regulated in Article 800-1 of the Tax Statute, initially conceived for the Zomacs. But we return to the problem exposed above; first the qualification of the geographic space as ADN must be given to access the benefit of works for taxes, which will be submitted to the Ministry of Culture for it to issue a concept on the stages of evaluation, feasibility and approval of the project and. in addition, the ceilings of the beneficiary projects must be regulated by the National Government.

In conclusion, we are still talking about the Orange Economy, waiting for the real implications that this strategy will have in the socioeconomic and political field in the country, since, to date, the regulation of the benefits it will bring to Colombians is lacking.