Colombia Proposes 19% VAT on iGaming

As part of Colombia's 2025 budget financing plan, the government, led by Finance Minister Ricardo Bonilla, is proposing to apply a 19% Value-Added Tax (VAT) to online gambling platforms. This measure aims to raise nearly COP 2 trillion, contributing to a total revenue target of COP 12 trillion.

Bonilla explained that large sports betting platforms, particularly those linked to major events like football matches, are a significant source of income and should be subject to fair taxation. He highlighted the need for these platforms to be formally recognized in the tax system.

Industry Response

However, the proposal has sparked concerns within the gambling sector. The Corporación Nacional de Empresarios de Juegos de Suerte y Azar (Cornazar) warned that the VAT could lead to job losses, reduced investment, and the closure of gambling establishments. Fecoljuegos echoed these concerns, stating that such a tax could make the online gambling industry "inviable" in Colombia. Additionally, Asojuegos argued that the measure could drive players towards illegal platforms, exacerbating the issue of unregulated gambling.

Political Debate

During discussions in the Senate’s Commission IV, Senator Carlos Maisel cautioned that increasing taxes could stifle economic growth at a time when Colombia is experiencing declining sales. In response, Bonilla clarified that no new taxes would be introduced, but rather existing rates would be adjusted. The proposal will be formally presented to the Senate and House of Representatives in the coming days.

The government's push to impose a 19% VAT on online gambling marks a significant shift in the country's approach to regulating and taxing the industry, with potential implications for both revenue collection and the sustainability of the gambling sector.