Colombia's Petro Administration Proposes Permanent VAT on Online Gambling in New Tax Reform
2026-07-24
Source: Yogonet
Colombia's government has proposed making the 19% VAT on online gambling permanent as part of its fifth tax reform, aiming to raise COP 1.7 trillion in 2027. The move follows previous legislative failures and a court ruling that struck down a similar decree.
Colombia's government under President Gustavo Petro has introduced its fifth tax reform proposal, just days before the administration's term ends. The bill targets COP 21.8 trillion (USD 6.75 billion) in additional revenue by 2027 and includes a key provision to make the 19% Value Added Tax (VAT) on internet-based games of chance permanent.
Proposal Details
The government expects the gambling sector to contribute COP 1.7 trillion (approximately USD 526.5 million) in tax revenue during the 2027 fiscal year. The proposal's explanatory document, filed on July 20—the start of a new legislative session—asserts that taxing online gambling would not create direct inflationary pressure. It argues that online games of chance fall outside the basic consumer basket for Colombian families, making the levy a distortion-free source of public financing.
Finance Minister Germán Ávila defended the initiative by stating that applying the standard VAT rate to online platforms "reduces the differential treatments that have been granted to the consumption of goods and services." The administration views this as an equalization measure between land-based and digital gambling operations, eliminating what it calls preferential treatment for digital services.
Previous Attempts and Legal Challenges
This is not the first time the Petro government has sought to tax gambling. Earlier reform bills that included similar measures failed to pass Congress. The administration also attempted to impose the tax via decree, but Decree 1474 of 2025—which established a 19% VAT on gross gaming revenue for online gambling—was struck down by the Constitutional Court. The court ordered a refund of all money collected while the decree was in effect.
Despite these setbacks, the government reports that the online gambling industry has continued to grow. According to the proposal, gross betting revenue increased by 20% as of June 2025 even while the temporary VAT was in place. The new bill seeks to cement the tax permanently, bypassing the temporary nature of previous attempts.