Colombia’s government is proposing to charge 19% VAT on every deposit made into an online betting account as part of a broad set of tax reforms aimed at improving the country’s finances.
The proposals also include a raise in the tax on lottery, raffle and betting prizes from 20% to 30%.
Speaking to NEXT.io, Evert Montero Cárdenas, president of trade body Fecoljuegos, said the measures would hit smaller to medium-sized operators the hardest.
“Colombia has built a regulatory trust that we must preserve,” said Montero Cárdenas. “This could create risks to sustainability, especially among small and medium-sized companies with less capacity to absorb new burdens.”
The measures are part of Bill 477/2026, the Ley de Rescate Económico (Economic Rescue Law), which was filed in Congress by the Ministry of Finance on Thursday (29 October).
The bill proposes deep cuts to state spending and also rewrites large parts of the tax code across VAT, income tax and corporate rates.
The ministry estimates that the new VAT on online deposits would raise COP 2tn (€565m) in 2027 and an average of COP 2.3tn (€649m) a year from 2028 to 2030. The proposed increase in taxes on prizes could bring in another COP 198bn (€56m) by 2028.
The VAT would be on top of existing rights fees operators must pay for a licence, with that money already ring-fenced for Colombia’s health system.
In a memo explaining its proposals, the government argued that introducing VAT to online gambling was a way to bring it in line with physical gambling venues, which already pay the tax.
It also said that the additional tax must be accompanied by action against unlicensed operators. The bill includes a provision for ISP-level blocking of offshore sites.
Race against time to amend bill
The government is pushing to approve the bill by the end of this year. “If there is no progress on this rescue law between now and the end of 2026, Colombia will enter default next year,” Vice President José Manuel Restrepo told local media.
However, Montero Cárdenas said there was still time to debate and potentially amend provisions.
“It is too early to say that operators will leave the market. We are analysing the impact, and we understand that this bill is still open to discussion and amendment,” he told NEXT.io.
Fecoljuegos is preparing a counter-proposal for the Ministry of Finance and Congress’s economic committees, although it has not yet set out the rates or mechanisms it will put forward.
He said that the sector was not opposed to the principle of contributing more.
“We understand that there’s a need to raise revenue, and we’re willing to pay our share. But taxes need to reflect the realities of our industry, so we can contribute without making it harder for legal operators to compete with illegal gambling sites.”
The bill follows an emergency decree issued by Colombia’s previous government, which had imposed 19% VAT on online gambling, but was struck down by Colombia’s Constitutional Court in January.