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Under President Gustavo Petro, the Colombian government last week passed Decree 0175 making major tax adjustments on several industries including online gambling. On client deposits on online gambling sites, the new law mandates a flat 19% Value Added Tax (VAT) Furthermore, taxes of 1% on coal and oil sales and on stock and bond transactions above 300 million Colombian pesos, almost €72,000, were imposed.
The human tragedy in the Catatumbo area on the Venezuelan border drove these policies of action given the serious bloodshed caused by ELN members interacting with FARC dissidents. The government announced a state of internal unrest on January 24, 2025, to last 90 days and brought in new taxes to generate money to relieve the crisis. These taxes will be maintained until December 2025, according to Finance Minister Diego Guevara, and might become permanent in the future. More than one trillion Colombian pesos in extra income are forecast from the new taxes.
The choice to levy the online gambling industry with a 19% VAT rate on consumer deposits is a major departure from the earlier model, which applied a graduated tax system of 15% to 17% depending on whether licensed operators kept a return to the player (RTP) rate above 83%. Colombia has set tax revenue from this industry specifically toward national public health initiatives since putting the online gaming sector under control in 2017.
Asojuegos, Colombia’s gaming industry association, has worried that the fresh tax system could promote the black economy, which would cause licensed operators to cut their offerings under the 78 percent RPT limit to stay profitable. Additionally under scrutiny by economic experts is the tax treatment of the industry, which implies that the nation might be passing by a source of badly needed tax income.
Apart from the tax on online gambling, the decree calls for a 1% tax on the initial sale of coal and oil exports as well as a 1% charge on notarial transactions above 300 million pesos. The affected industries have resisted these actions on the basis that the extra expenses might have a hostile effect on employment and investment. The government insists, even so, that the money generated is necessary to solve the humanitarian catastrophe and violence in Catatumbo.
President Petro has been hostile to the tax system for internet gambling since taking office in 2022 and has aimed to overhaul it to boost income and support social services. The Colombian General Assembly discussed tax measures suggested by Petro in 2024, including the divisive recommendation to apply a 19% VAT on sales produced by digital platforms including online gaming. First turned down by the Treasury, which judged it legally unenforceable, the government put this rule into place during internal turmoil.
These tax policies’ implementation arrives against a larger backdrop of discussions on how to tax conventional and modern industries in Colombia. The Colombian Congress passed tax reform in November 2022 that raised taxes on high-income people and fossils to produce more funds for social programs and to fix the public finances of the nation.
In essence, the Colombian government’s approval of Decree 0175 shows their attempt to solve social and human crises via thorough tax reform. The government contends that these actions are required to urgently raise funds and solve important national issues, hence even though new taxes on online gambling and other industries have provoked opposition and controversy.
Source: SBC, El País
