A 19% VAT rate carried into the final stretch of Petro’s term
Colombia’s Ministry of Finance has submitted a new tax reform bill to Congress that keeps the 19% Value Added Tax (VAT) on online gambling in place, part of a wider push to raise COP 21.8 trillion (around US$6.7 billion) in additional government revenue by 2027. Finance Minister Germán Ávila filed the bill on July 20, just over two weeks before President Gustavo Petro leaves office on August 7.
Gambling is expected to contribute roughly COP 1.7 trillion of that total, the government says. Continuing the 19% VAT on internet-based games of chance from January 1, 2027 is one of the specific revenue measures in the reform, replacing the temporary consumption tax that has applied to the sector under Decree 173 of 2026.
The bill also extends the 19% VAT to concerts, sporting events, and other entertainment, cultural, and recreational services, and raises the general VAT rate on hybrid cars from 5% to 19%.
Government defends equal tax treatment for online operators
The Ministry of Finance argues that keeping the VAT on online gambling gives the state a sustainable revenue source without a meaningful effect on inflation, and closes the gap between how land-based and online gambling are taxed.
Equalizing the tax burden between land-based games of chance and those operated online will help finance the 2027 budget, contribute to permanently increasing tax revenue, and will not have significant effects on the overall price level.
The explanatory document accompanying the bill also frames the change as a matter of tax principle, not just revenue. Applying the general VAT rate to online platforms, the government says, removes a differential tax treatment that in many cases lacks justification under the constitutional principles of progressivity, horizontal equity, efficiency, and simplicity.
Winnings tax would rise, with an unresolved discrepancy
The bill would raise the tax on winnings from lotteries, raffles, sports betting, and similar games from 20% to 30%. One section of the draft sets the rate at 30%, while a later section references a possible increase to 33%. The government has not explained the gap between the two figures, leaving it as a point Congress will likely have to resolve during debate. Until the reform is enacted, gambling winnings continue to be taxed at 20%.
The VAT treatment of online gambling has already gone through several rounds of change this year. A Constitutional Court ruling provisionally suspended an earlier emergency decree that had reinstated the 19% VAT through executive powers, and the government subsequently issued Decree 0240 in March, setting a 16% national consumption tax on online gambling and betting as a stopgap. The new bill would settle the rate at 19% on a permanent, legislative footing rather than through emergency decrees.
A bill facing long odds
The reform largely repeats the substance of a financing law Congress rejected on December 9, 2025, and arrives with little legislative runway left in Petro’s term. José Manuel Restrepo, transition chief for president-elect Abelardo de la Espriella, has asked the outgoing government not to file the bill at all, arguing that fiscal policy decisions belong to the incoming administration. A former finance minister under Petro has said the bill has no realistic prospect of passing this Congress.
Industry calls for sustainable tax policy
Colombia’s regulated online betting operators are still adjusting to a year of shifting tax rules. Speaking on the sidelines of SBC Summit Americas 2026, Iliana Pineda, Chief Legal & Compliance Officer at Wplay, described the toll the changes have taken on operators.
It has been a very challenging year for the entire industry. The impact of the new tax burden was significant, although today we can say there is some relief. A year ago, we were talking about a tax burden exceeding 70%, a completely unviable level for any business.
Pineda struck a more optimistic note about where the market is headed, provided the rules stay predictable.
The expectation is that the industry can continue growing. It has been demonstrated that technical, clear, and robust regulation, combined with the sector’s commitment to doing things properly, creates a sustainable environment. The challenge now is to continue building consensus with the government so that this growth can be maintained.
Congress must still debate and pass the bill before any of its measures take effect, a process that requires four debates and stretches well into the term of Petro’s successor. Colombia’s operators, in the meantime, are left managing a fifth attempt at tax reform in as many years, with the online VAT question no closer to a permanent answer than it was in 2025. The regulatory volatility playing out across Latin American betting markets is becoming a pattern operators in the region will need to plan around, much as the EU’s own push for a sector-wide fiscal overhaul and Malta’s overhaul of gambling VAT and gaming tax show governments elsewhere reaching similar conclusions about how online operators should be taxed.
Source: SBC
