Colombian Senate rejects tax reform including VAT on online gambling
Colombia’s Senate has rejected the tax reform proposal promoted by President Gustavo Petro, which represents a significant setback for the Executive and nullifies the initiative that sought to raise $16 trillion destined for the 2026 Budget. Crucially the reform would have made the 19% Value Added Tax (VAT) on online gambling permanent.
Colombia’s Senate has rejected the tax reform proposal promoted by President Gustavo Petro, which represents a significant setback for the Executive and nullifies the initiative that sought to raise $16 trillion destined for the 2026 Budget. Crucially the reform would have made the 19% Value Added Tax (VAT) on online gambling permanent.
The decision came after a vote in the Senate’s Fourth Committee, in which nine senators voted against it and only four supported the positive report, leading to the immediate shelving of the project, the committee reported.
The tax reform included increasing VAT on petroleum products and other taxes on the hydrocarbon and coal extraction industry, increasing taxes on tobacco, alcoholic beverages, online gambling and other goods and services, as well as applying an additional tax burden on income and wealth. The proposed tax hike sought to secure the financing of the government’s 2026 budget and is more than double the tax hike that was rejected by Congress last year.
Finance Minister Germán Ávila had presented the reform considered key to financing the Executive’s programs and commitments in 2026. However the Senate’s Fourth Committee’s refusal proved decisive in halting the Petro government’s fiscal proposal, which sought to strengthen public finances in the lead-up to the next budget cycle.
In September the Colombian Federation of Entrepreneurs of Games of Chance and Luck (Fecoljuegos) expressed serious concerns regarding the Colombian government’s proposal to impose a permanent 19% Value Added Tax (VAT) on deposits made on online betting platforms.
In a statement, Fecoljuegos outlined their position:
“The 19% VAT applied to deposits on online betting platforms is based on a fictitious foundation, not a real business variable. It is comparable to applying this tax on deposits made in the financial sector. The money enters the system, is reused several times, but does not constitute added value or patrimonial income for the financial intermediary,” Fecoljuegos said. Initial government estimates had suggested that the proposed VAT could generate 1.2 trillion pesos annually, or nearly 1 trillion over ten months. However, Fecoljuegos criticized this projection as “misleading,” arguing that it is based on a calculation that does not correspond to the sector’s actual added value.
