In Colombia, the government has announced a major change in online gambling taxation. Licensed operators will continue to pay a 19% value-added tax (VAT), but the levy will now apply to gross gaming revenue (GGR) instead of player deposits.
Industry stakeholders have welcomed this move as a fairer approach. The Colombian Federation of Gambling Entrepreneurs (Fecoljuegos) described the change, confirmed through an emergency decree on Monday, as “a significant step forward.” Previously, Fecoljuegos argued, taxing deposits “did not reflect the sector’s economic reality.”
Emergency Decree Follows Deposit-Based VAT End
The deposit-based VAT was scheduled to end on 31 December, after Colombia’s Senate Fourth Committee voted against the Financing Bill last month. The legislation had initially proposed making the deposit-based tax permanent, introduced last February to fund civil unrest responses in the Catatumbo region. It also sought to increase capital gains taxes on gambling and lotteries from 20% to 30%.
Instead, the emergency decree reallocates the 19% VAT to GGR for 2026. The government enacted the measure after the Financing Bill collapse created a COP16.3 trillion ($4.2 billion) shortfall in next year’s budget. However, some opposition politicians and business leaders have questioned the decree’s legality, raising the possibility of future court challenges.
Fecoljuegos Highlights Positive Impact
Fecoljuegos previously warned that VAT on deposits caused online gambling GGR to drop by 30%. The new tax approach “acknowledges, for the first time, the true math of the business,” the federation said.
According to Fecoljuegos, the industry is now transitioning from a disproportionate system, where the tax burden could exceed 70% of real income, to a scenario where the tax burden is roughly 34% of gross revenue. While the move improves fairness, the federation emphasized that it is only a first step, as the total tax burden remains above international averages.
Toward a Sustainable Tax Model
Fecoljuegos stressed that this change should serve as the starting point for dialogue with authorities to achieve a sustainable long-term model. “This adjustment allows us to move beyond a clearly unviable situation and opens a minimal, but necessary, margin for legal operators,” the trade body said.
However, the federation warned that Colombia still lacks a highly competitive market aligned with global business practices. Fecoljuegos remains committed to constructive dialogue with authorities, aiming to benefit the national economy and the healthcare system.
