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Colombia – Healthcare crisis could lead to increased taxes on online sports betting  

By - 12 February 2024

A new initiative supported by President Gustavo Petro proposes funding healthcare through taxes on online sports betting, aiming to address the sector’s deficit and avoid the need for a new tax reform. It would also provide essential resources for public health. According to local press there is growing consensus for the bill in Congress.  

The bill was devised by surgeon and senator belonging to the Social Party of National Unity (Partido Social de Unidad Nacional) Antonio Correa.

After initial technical and economic studies by the lawmaker, it was concluded that a new contribution to healthcare should come from online sports betting as it has shown significant growth in recent years.

“There is no need for a new tax reform. The resources needed for healthcare reform are in the multibillion-dollar wealth generated by online sports betting. An additional contribution from these is the formula for having more preventive healthcare. On February 16th, we will present the proposal that will benefit millions of low-income Colombians,” commented Correa on his social media channels.

This proposal complements healthcare reform that will begin debate in the Senate in the legislature starting on February 16.

Additionally increased taxes could contribute to compensating for the Capitation Payment Unit (UPC) increase of 12.01% for the current year, which, according to healthcare providers, was lower than expected as they were hoping for a 15% increase. The Capitation Payment Unit (UPC) is a measure used in healthcare financing systems to determine payments to healthcare providers, such as hospitals or clinics, based on the number of enrolled individuals or the population they serve. The UPC helps in budgeting and allocating resources within the healthcare system.

Talking to Investigative Journalism Agency (Agencia de Periodismo Investigativo) the senator said:

“It cannot be that while the healthcare sector faces budgetary crises, the government seeks reform and needs resources, EPS (Health Promoting Entities) are suffocating, with many on the brink of bankruptcy, as are healthcare institutions (IPS), and people continue to die at hospital doors or suffer while awaiting medical appointments, the entrepreneurs of online sports betting and other forms of gambling are enriching themselves, and, worse yet, squandering substantial resources that could be used to save lives or at least improve the quality of life for many Colombians.”

The proposal argues that while companies exploiting sports betting and other online activities have low taxation and make billions in revenue and profits, their contribution to the state through taxes is not proportional, especially in the context of a healthcare sector in crisis due to lack of resources.

Revenue from gambling goes directly to the Colombian healthcare system. Because gambling plays such a vital role in raising revenue for the Colombian health service it has become increasingly likely that the gambling industry could become part of a larger political struggle as Petro looks to impose his own vision on health care overall. In December Colombia’s Lower House approved the government’s health-care reform, which seeks to limit the role of the private sector and moved to the Senate, where it faces two debates before the end of the first half of 2024. Petro’s proposal cuts the role of insurers as intermediaries, with the aim of allowing the government to pay care providers and medical professionals directly.

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