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ARTAGENA – The head of Colombia’s leading business association said on Wednesday that new leftist President Gustavo Petro must be careful to ensure potential tax and labor reforms do not have an undesired impact on the economy.

The Petro administration, which took office on Sunday, has proposed a tax reform bill to Congress that would raise some 25-trillion pesos ($5.8-billion) in 2023 in an effort to increase revenue for anti-poverty programs.

In addition, new Labor Minister Gloria Ines Ramirez has said she will back a bill to change some contractual stipulations and modify working hours.

Just by removing certain exemptions, the government hopes to collect 5.1 trillion pesos.

But the president of the Colombian Business Association(ANDI), Bruce Mac Master, said there were concerns about the tax burden that the measures would impose on businesses.

“When you start to look into the details … it’s causing great concern for us today because we are doing a lot of analysis where we are seeing that businesses are going to have a very heavy tax burden,” Mac Master said during the ANDI’s annual congress in the Caribbean city of Cartagena.

Mac Master said oil producers, together with coal and goal miners, would have to pay around 7 trillion pesos due to proposed taxes on those commodities.

New tax legislation “has to be careful” not to alienate investment in the country, where 50% of the labor market is in the informal sector, Mac Master said, who also warned against Ramirez’s plans to back a bill to change some contractual stipulations and modify working hours.

“There is a very large incentive if costs eventually rise for people to move to informality or for employers not to formally employ workers,” Mac Master said.

Mac Master said he hopes for “dynamic” communication with the Petro government.

Some Petro proposals, especially a ban on new oil projects, have created uncertainty among investors.

“The rules of the game are a fundamental part of constructing confidence so that one can count on bigger investments,” Mac Master said.