Effects of Constitutional Court Judgment C-431 of 2025 on Legislative Decree 175 of 2025

Context Based solely on Constitutional Court Press Release 44 (October 14–16, 2025), the Court reviewed Legislative Decree 175 of 2025, which enacted tax measures to finance General Budget expenditures linked to the state of internal disturbance in the Catatumbo region.

In Judgment C-431 of 2025, the Court upheld Articles 1 (paragraphs 1–4) to 10 and struck down paragraph 5 of Article 1, while strictly conditioning the scope of collection, the permitted budgetary destinations, and the restitution of any over-collection.

The Court’s decision The Court partially upheld Decree 175 but imposed two core constraints. First, the Government may collect only what is strictly necessary to fund appropriations in the sectors of Health and Social Protection; Social Inclusion; Equality and Equity; Presidency; Agriculture and Rural Development; Education; and Defense, as defined in Judgment C-381 of 2025, which itself trimmed back additions to the budget originally set in Decree 274 of 2025. Second, any collection in excess of the valid budget additions must be refunded or offset to taxpayers on a pro rata basis.

In addition, the Court declared unconstitutional paragraph 5 of Article 1 of Decree 175. While the Press Release does not develop its reasoning, paragraph 5 had ordered Coljuegos EICE to require Internet Service Providers to block channels, websites, and any media that in any way serve the operation, exploitation, sale, payment, advertising, or commercialization of unauthorized games of chance. The Press Release makes clear that this provision failed the requirements of legal necessity and material nexus applicable to measures adopted under states of exception.

The ruling imposes a material cap on revenues under Decree 175: collections are limited to the amount strictly needed to finance the surviving appropriations in the sectors expressly listed by the Court in C-381/2025. Any sums beyond that cap lack a constitutionally valid cause and must be returned.

To operationalize this, the Court issued time-bound instructions: The Ministry of Finance must, within 30 business days, compute the amount of budget additions authorized by Decree 274 of 2025, as refined by C-381 of 2025. That computation sets the maximum permissible collection under Decree 175. The DIAN must determine the actual amount collected pursuant to Decree 175 and, if this exceeds the Finance Ministry’s valid addition, process refunds or offsets pro rata to all taxpayers who paid the taxes under the decree. For this determination, DIAN has until the last day of the month following the due date for filing and paying the last of the taxes covered by Decree 175. Taxpayers will have five years from the date DIAN issues its report to request the corresponding refund or offset. The Ministry of Finance must ensure budget availability and programming needed to effect the restitutions; and the Comptroller General must exercise fiscal oversight over the entire process.

In short, the Court did not annul the taxes created by Decree 175, but it conditions their collection on the budgetary nexus defined by C-381/2025. Any over-collection above the constitutionally valid appropriations may not be retained in the Treasury and must be returned to those who paid.

For taxpayers who paid under Decree 175, the ruling creates a right to pro rata restitution or offset for any portion of collections exceeding the valid budget cap. Identifying the excess depends first on the Finance Ministry’s computation of preserved additions under C-381 and then on DIAN’s determination of actual collections under Decree 175.

For fiscal and budget authorities, the ruling binds the use of funds: resources may not be retained for destinations not authorized by C-381/2025, and the use of proceeds must be confined to the listed sectors. The Court also mandates a procedural roadmap with fixed deadlines, subject to fiscal audit.

The Court aligns the control of Decree 175 with two prior decisions: C-148/2025, which partially upheld the state of internal disturbance and circumscribed its purposes to humanitarian relief, rights protection, strengthening of the public force, and their financing; and C-381/2025, which pared back budget additions under Decree 274 of 2025. The collectible amount under Decree 175 is therefore subordinate to the appropriations that survived constitutional review in C-381.

In the near term, the Finance Ministry and DIAN must activate the calculation, reconciliation, and restitution mechanics ordered by the Court, strictly observe deadlines, and ensure transparency and traceability, with the Comptroller General providing fiscal oversight. For taxpayers, the five-year window from DIAN’s report will be decisive for pursuing refunds or offsets.