Colombia: Fiscal alert, considers increasing gambling taxes
The Minister of Finance, Germán Ávila, confirmed that the gambling sector is "under scrutiny" to finance the recovery of areas affected by floods. The measure comes after the provisional suspension of VAT on iGaming by the Constitutional Court.
The National Government of Colombia has launched an economic contingency plan to address the devastation of the climate emergency, especially in critical regions such as the department of Córdoba. To finance reconstruction and assistance to those affected, the Ministry of Finance estimates a preliminary need of COP 8 billion (approx. US$ 1.95 billion).
While the main burden will fall on the wealth tax of the 15,000 largest companies in the country, the gambling sector is once again a key component in the revenue collection strategy. Minister Germán Ávila explained that they are evaluating "modifying the tax structure," an alternative that has precedents in previous emergency situations.
The precedent of VAT and the Constitutional Court
The announcement comes at a time of legal uncertainty for the industry. Recently, the Constitutional Court provisionally suspended the emergency decree that sought to levy a 19% VAT on the Gross Gaming Revenue (GGR) of games operated online.
Given this judicial halt, the Executive is now seeking alternative avenues through new decrees that would allow for accelerated resource collection without incurring the same legal flaws that paralyzed the previous measure.
Impact on the industry
For the iGaming sector in Colombia, this potential tax increase represents a challenge to competitiveness in one of the most mature markets in the region. Operators and industry associations are closely monitoring the development of these decrees, warning that an increase in tax pressure could incentivize users to return to the unregulated market.
For now, the Ministry of Finance continues its technical analysis of the measures before formally presenting them to the Council of Ministers, while the industry remains expectant of how the tax structure will be redefined in the short term.
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