The Colombian government announced on Thursday it would present to Congress a bill proposing a temporary tax to raise money to strengthen the military.

Finance Minister Alberto Carrasquilla said the military tax was aimed at raising 1.16 billion U.S. dollars over two years, taxing only wealthy people and businesses.

He added the proposal would be presented after July 20, when the new Congress, chosen in the country's March election, begins work.

The last such tax, named the war tax by Colombia's media, was created in 2002, charging 0.3 percent on all financial holdings above 1.1 million dollars.

The new proposed tax is part of the so-called "democratic security" plan which is a central part of President Alvaro Uribe's program. The plan aims to channel more funds to the army and police to reinforce their efforts to quell the internal armed conflict which has been Colombia's scourge since the mid-1960s.

As part of the country's main tax reform, Colombia's finance ministry plans to increase value added tax to 17 percent from 16 percent, and extend it to public services, a proposal that has infuriated Colombia's press. It also proposes a range of new taxes at rates between 10 and 25 percent.

At the same time, Colombia plans to reduce income tax from its current rate of 38.5 percent to 33 percent for the first year after the change is introduced and 32 percent for the second year.

Source: Xinhua