Colombia Proposes Tax Reform to Maintain 19% VAT on Online Gambling

The Colombian government has now introduced a new tax reform bill, which includes that online gambling will continue to be subject to 19% Value Added Tax (VAT) as part of an overall goal of raising public revenue. The plan, which was presented to the government by the Ministry of Finance in the last months of President Gustavo Petro’s tenure, is designed to raise COP 21.8 trillion more in government revenue by 2027.

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The gambling industry will bring in about COP 1.7 trillion of that, according to the government. The continuation of the 19% VAT on Internet-based games of chance was one of the revenue-generating measures chosen by the officials for the reform.

In addition to online gambling, the proposal would also impose the 19% VAT on concerts, sporting events, and other entertainment, cultural, and recreational services, as well as on the general rate for hybrid cars, which would rise from 5% to 19%.

Government Defends Equal Tax Treatment for Online Operators

The Ministry of Finance says that keeping the VAT on online gambling will generate a sustainable source of public finances while not having a big impact on inflation. The measure also will lead to a greater uniformity among land-based and online gambling taxation, the government notes.

The government said in the explanatory document that accompanies the bill: “Equalizing the tax burden between land-based games of chance and those operated online will help finance the 2027 budget, contribute to permanently increasing tax revenue, and will not have significant effects on the overall price level.”

The official also explained the reason for the removal of different tax treatment for online platforms, saying: “Applying the general VAT rate to online platforms reduces the differential tax treatments granted to the consumption of goods and services, which, in many cases, lack justification based on the principles of progressivity, horizontal equity, efficiency, and simplicity that the Constitution requires the tax system to guarantee.”

Additional Changes Affect Lottery and Betting Winnings

The bill also would raise the tax rate on winnings from lotteries, raffles, sports betting and other similar games from 20% to 30%. Winners would have to pay a higher tax rate on their occasional gambling winnings if the bill is enacted into law by Congress.

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The proposal includes a so-far mere inconsistency, however. One section has a rate of 30%, but a later one refers to the possibility of a 33% increase. The Colombian government, as yet, hasn’t explained the difference, so it could be one of the points to be discussed during the debate in the current Congress.

Now, the reform will have to be discussed and approved by Congress before it can become effective. Gambling prizes will continue to be taxed at 20% until then.

Industry Calls for Sustainable Tax Policy

The suggested changes come as Colombia’s legal online betting segment is adapting to the latest tax modifications. Iliana Pineda, Chief Legal & Compliance Officer for Wplay, spoke about the fiscal landscape in the industry and the difficulties operators have encountered at SBC Summit Americas 2026.

Pineda added: “It has been a very challenging year for the entire industry. The impact of the new tax burden was significant, although today we can say there is some relief. A year ago, we were talking about a tax burden exceeding 70%, a completely unviable level for any business.”

Even faced with the difficulties, she was hopeful for the future of Colombia’s regulated market: “The expectation is that the industry can continue growing. It has been demonstrated that technical, clear, and robust regulation, combined with the sector’s commitment to doing things properly, creates a sustainable environment. The challenge now is to continue building consensus with the government so that this growth can be maintained.”

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Source: SBC Noticias