Water pollution is one of the most important environmental problems for Colombian society. The Law 99 of 1993 and the Decree 901 of 1997 established the use of an economic instrument: environmental taxes, in order to obtain the required environmental quality minimizing costs. This instrument has been implemented for seven years and has been evaluated several times. This paper analyses the “Water Environmental Tax” foundations, studies the evaluations of this instrument and the factors related to achievement of environmental goals, institutional strengthening and enforcement by means of surveys made to Local Environmental Authorities, in order to assess if previous evaluation results are still in force, and if Local Environmental Authorities have been strengthen by the instrument implementation. This program effectiveness and viability depends on strength and leadership of institutions not only characterized by financial autonomy and politic independence but also managed by high qualified human resources with great scientific and technological capacity. Currently, most Colombian Local Environmental Authorities are so far from this model.