Colombia to introduce 19% VAT on online gambling in new tax reform proposal

Colombia’s Minister of Finance, Diego Guevara, has confirmed that the government of President Gustavo Petro is preparing a new tax reform aimed at raising 12 trillion pesos. The proposal, which includes a 19% VAT on online gambling, will be presented to Congress in the coming weeks, following the failure of a similar initiative in late 2024.

Among the key measures in the reform, Minister Guevara highlighted that three decrees issued under the state of emergency in Catatumbo will be made permanent. These measures include the introduction of a 19% VAT on legal online gambling platforms, such as online casinos and sports betting. However, traditional lotteries like Baloto and chance will remain unaffected by this tax.

The previous reform, led by former Minister Ricardo Bonilla, was rejected by the economic committees of the Senate and the House of Representatives, forcing the government to rethink its strategy. With this new proposal, the administration hopes to gain the necessary support for approval and strengthen the country’s finances.

Guevara emphasized that the reform not only aims to increase revenue but also to reduce the tax burden on small and medium-sized enterprises by lowering their income tax rate from 35% to 30%. Additionally, the proposal will include elements from the previous failed reform, such as amnesties to facilitate payments with the National Tax and Customs Directorate (DIAN).

In the coming weeks, it will become clear whether the government can achieve the necessary consensus to pass this tax reform.

Colombia has a long history of gambling, with traditional lotteries and chance games being popular for decades. Today, online gambling, including casinos and sports betting, is legal and regulated under Law 643 of 2001 and subsequent decrees. The Colombian Gaming Control Board (Coljuegos) serves as the regulatory body overseeing the industry, ensuring compliance and promoting responsible gambling practices.