Colombia’s Outgoing Petro Administration Revives Push for Permanent Online Gambling VAT

With just weeks left before President Gustavo Petro leaves office, his government has submitted a new tax reform bill to Colombia’s Congress that seeks to make the 19% value-added tax (VAT) on online gambling a permanent fixture.

The bill, presented on Monday, comes ahead of the 7 August inauguration of president-elect Abelardo de la Espriella. The Petro administration previously attempted to cement the levy through a Financing Law in December last year, but that measure was rejected by the Senate’s Fourth Committee.

The 19% VAT was initially introduced as an emergency tax in February 2025, ostensibly to fund the government’s response to civil unrest in the Catatumbo region. At that point the tax was applied to player deposits. After being briefly shifted to a gross gaming revenue (GGR) basis, the Constitutional Court suspended the measure. In March, the government enacted a separate emergency decree imposing a 16% consumption tax on deposits to finance flood relief in eight provinces.

The new bill proposes reverting the VAT to a deposit-based system. According to law firm Baker McKenzie, that change is likely to intensify industry opposition. The government projects that making the VAT permanent would generate roughly COP1.7 trillion ($530.8 million) in tax revenue from online gambling by 2027.

Industry Impact Disputed

Colombian authorities argue that the emergency VAT achieved its revenue targets without unduly harming the sector. The bill states there is “no evidence of significant deterioration in the sector that would justify terminating or scaling back the measure.”

However, this claim contradicts data from the Colombian Federation of Gambling Entrepreneurs, which reported in April 2025 that online GGR had fallen by 30% in the two months following the tax’s introduction. Several major operators responded by crediting players with bonuses to offset the new levy.

The government also defends the permanent VAT as a matter of competitive neutrality, noting that land-based casinos already pay a 19% VAT. The bill asserts that without this change, “starting 1 January 2027, these digital services would receive preferential treatment compared to physical gambling establishments subject to this tax,” and that applying VAT to online platforms reduces “differential treatment” that lacks justification under principles of progressivity, horizontal equity, efficiency and simplicity.

Given the Petro administration’s repeated difficulties advancing tax legislation through Congress, the new bill may face significant headwinds before the change of government.