Colombian gambling industry stakeholders have welcomed the government’s decision to shift online betting VAT from deposits to gross gaming revenue (GGR).
The Colombian Federation of Gambling Entrepreneurs (Fecoljuegos) said the move, confirmed in an emergency decree dated 29 December, is “a significant step forward”.
Fecoljuegos said the previous VAT tax on deposits “did not reflect the sector’s economic reality”.
Emergency decree
The deposit-based tax was expected to end on 31 December after the Senate’s Fourth Committee voted against the Financing Bill last month. The proposed bill would have made the tax permanent after it was introduced last February to cover the cost of tackling civil disturbance in the Catatumbo region. The defeated legislation would have also hiked capital gains tax on gambling and lotteries from 20% to 30%.
Article 2 of the government’s emergency decree confirmed the reallocation of the 19% VAT for the duration of 2026. The government enacted the legislation after the collapse of the Financing Bill left a COP16.3 trillion ($4.2 billion) hole in the government’s 2026 budget.
However, some opposition politicians and business leaders have questioned the legality of the emergency decree, with possible court battles ahead.
‘Acknowledging the true math’
Fecoljuegos warned last April that VAT on deposits had resulted in online gambling GGR nosediving by 30%. However, the latest change “acknowledges, for the first time, the true math of the business”, the trade body said.
“The sector is transitioning from a profoundly disproportionate system, where the tax burden could exceed 70% of real income, to a scenario with a tax burden of approximately 34% on gross revenue,” Fecoljuegos said.
However, Fecoljuegos added that the latest move “is only a first step”, with the overall tax burden still “well above international averages”.
Seeking a sustainable model
The federation added: “This cannot be the end point, but rather a starting point for continued dialogue with the authorities toward a sustainable long-term model.
“This adjustment allows us to move beyond a clearly unviable situation and opens a minimal, but necessary, margin for the operation of the legal industry.
“Nevertheless, this change is still not enough for Colombia to have a highly competitive market aligned with global business models.”
Fecoljuegos added that it remains “committed to a serious and constructive technical dialogue with the authorities, for the benefit of… the national economy and the healthcare system”.
Licensed operators in Colombia will continue to face a 19% value-added tax, although this time on GGR rather than deposits.