Colombia’s outgoing government makes final push to permanently tax online gambling

Colombia’s government has introduced a new tax reform bill that would make the taxation of online gambling a permanent feature of the country’s fiscal framework, as President Gustavo Petro’s administration seeks to raise COP21.9tn (approximately US$5.4bn) in additional revenue for the 2027 budget before leaving office.

The proposal, submitted to Congress by Finance Minister Germán Ávila, forms part of a broader package of revenue-raising measures targeting sectors including fossil fuels, tobacco, vaping products and online gambling.

The government says the reform is intended to strengthen public finances and reduce Colombia’s fiscal deficit.

Explaining the need for the reforms, Ávila said Colombia faced significant fiscal challenges. “We have fiscal problems that must be addressed adequately… and to do so, among other things, we require a series of tax reforms that ensure higher tax revenues,” he said in an interview with Blu Radio.

For the gambling sector, the bill would establish a permanent legal basis for the 19 per cent VAT on online gambling through ordinary legislation, ending the uncertainty that has surrounded the measure since it was first introduced.

The tax has had a turbulent legislative history. The Petro administration introduced a temporary 19 per cent VAT on online gambling under emergency powers in early 2025 as part of measures linked to the security crisis in the Catatumbo region. Attempts to place the levy on a permanent legislative footing subsequently failed in Congress, while the emergency framework underpinning the tax was later struck down by Colombia’s Constitutional Court, leaving the long-term status of the measure uncertain. The latest reform seeks to resolve that uncertainty by incorporating the tax into ordinary legislation.

The reform represents one of the final major economic initiatives of President Gustavo Petro’s administration. Under Colombia’s constitution, Petro cannot seek immediate re-election, with voters due to elect a new president in 2026 before a new administration takes office in 2027. As his term enters its final phase, the government faces a narrowing window to secure approval for key legislative priorities, including its long-running effort to permanently tax online gambling.

The bill now begins its passage through Congress, where the government is likely to face another difficult legislative battle. Previous efforts to permanently introduce the gambling tax failed to secure sufficient support, meaning the latest proposal will again test lawmakers’ appetite for expanding Colombia’s tax base while the Petro administration remains in office.