Asojuegos: VAT on gambling jeopardizes sector sustainability
Following the official presentation of the new tax reform proposal by the Government of President Gustavo Petro, which includes maintaining the 19% VAT on online betting, the Association of Games of Chance and Gambling (Asojuegos) has expressed its concern about the negative effects this measure could have on the sector's sustainability and the revenue allocated to public health.
In statements to national radio media, Juan Carlos Restrepo, president of Asojuegos, warned that the intention to make the 19% VAT on online games permanent — a tax that has been applied for nine months to address the emergency in Catatumbo — represents a high risk for operating companies and for the transfers made to the health system. Restrepo stated: “What the trend in recent months has shown is that the transfer to health that was made directly has decreased. Even the VAT itself that has been collected has lost strength,” he said in an interview with Blu Radio.
The union leader explained that for this year, transfers exceeding COP 530 billion (USD 132 million) to health were expected, but the figure will barely reach COP 370 billion (USD 92.5 million). According to Restrepo, the tax burden for Colombian online gaming companies is increasingly heavy, as it includes exploitation rights, withholdings, taxes on occasional winnings, and now VAT, which places national platforms at a disadvantage compared to international ones.
Restrepo also questioned the VAT charge on Colombian players participating in international platforms without contracts in the country. For the executive, “that is almost an invitation to those who have contracts in the country to operate from abroad,” since they would only pay VAT and not the full range of taxes they must assume in Colombia, such as exploitation rights, income tax, or withholding tax.
This situation, he added, encourages a shift towards illegality. Another aspect that worries Asojuegos is that the bill does not specify nor has it discussed the tax base to apply VAT to online platforms, which could discourage participation in authorized operators. “Charging VAT on deposits ends up being something that discourages players’ participation on platforms that have contracts in the country,” Restrepo argued.
Regarding the proposal in the Financing Law to increase the occasional winnings tax from 20% to 30% for prizes exceeding a certain threshold, the president of Asojuegos emphasized that this sends a negative message to users: “All the messages are: bet in other venues where they don’t take that part of your winnings. That is quite serious because these decisions directly affect legality,” he maintained.
Faced with this scenario, Restrepo expressed Asojuegos’ willingness to dialogue with the Executive and seek solutions, proposing from now on to modify the tax base so that it does not fall directly on players’ deposits. “It is appropriate to seek responsible solutions. The important thing is not to continue encouraging illegality nor to affect the income that health receives,” he concluded.
Tags: Colombia, regulation, taxes, Asojuegos