The Colombian Federation of Games of Chance and Gambling (Fecoljuegos) has rejected the possibility of imposing a VAT on sports betting platforms in Colombia amid the tax reform proposed by the Petro government.
Fecoljuegos argued that online gaming operators in Colombia already operate under a structure of high costs and investment, with a return to players between 90% and 95% of the bets. Additionally, they pay approximately 20% in exploitation rights, which is subsequently allocated to health.
“This is a sector that generates more than 150,000 direct and indirect jobs among online game operators and other companies that are part of the value chain, many of which are vulnerable populations, single mothers, diverse individuals, or people with disabilities,” the federation argued.
The federation added that the sector is facing a growing phenomenon of illegality framed by betting platforms that do not have authorization from the regulator, and the VAT on sports betting platforms in Colombia could be a setback.
“In light of this, imposing new taxes on a sector that already has high costs, has survived despite the significant phenomenon of illegality, and has numerous taxes would make the activity completely unfeasible. It not only puts at risk the jobs of more than 150,000 people in Colombia,” stated the organization. Furthermore, it would jeopardize 400 billion pesos in exploitation rights for health that the government receives.
Last week new details emerged regarding the new tax reform project proposed by Gustavo Petro’s government, which aims to raise 12 trillion pesos. The details were revealed by Wadith Manzur, a member of the House of Representatives from the Conservative Party, following a private meeting between congress members and the Minister of Finance, Ricardo Bonilla.
According to the congressman, among other things, the proposals are still being negotiated between the minister and the president. Manzur stated that the Petro administration is targeting new sources of revenue. Among other points, the proposal would introduce a 19 percent VAT on online gambling.
Juan Carlos Restrepo, president of the Colombian Association of Gaming Operators (Asojuegos), also criticised the proposed tax last week.
“I believe this is a serious mistake that will impact the revenues currently available for health in Colombia because the operation of online games has significantly increased its resources and contributions to the health sector; these will be the ones most affected, in addition to potentially making many companies completely unviable in their operations in the country,” Restrepo said.