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The Constitutional Court of Colombia made the announcement late last night regarding the provisional suspension of the economic and social emergency decree, indicating that the decree will remain suspended “while a final decision on the merits is issued.” This decision will immediately suspend the legal effects of the decree signed by Colombian President Gustavo Petro, adding a new level of uncertainty for various industries, including the gambling industry.
The emergency decree was introduced as a response to the National Congress’s rejection of a proposed tax reform in early December. The decree was used as an alternative means by the executive branch to provide the government with additional public funds, thereby circumventing the legislative process.
Background: The Economic Emergency Decree
The suspended decree aimed to enable the government to collect around 16.3 trillion Colombian pesos to finalize the national budget for 2026. According to Decree 1390, the government was authorized to “issue decrees with the force of law” for a period of 30 days, including the imposition of new taxes if necessary.
The use of emergency powers is constitutionally allowed in Colombia, but these are strictly subject to judicial review, especially in terms of necessity, proportionality, and compatibility with the Constitution.
Impact on New Gambling Taxes
One of the most-watched aspects of the decree was its impact on the gambling industry. According to the decree, a 19% value-added tax (VAT) on online games of chance was imposed on both foreign and local gambling operators. The tax was to be paid based on the gross gaming revenue (GGR), which had a profound effect on the taxation framework for online gambling in Colombia.
After the Court’s ruling, the Constitutional Court issued a press release to clarify that, due to the provisional suspension of the economic emergency, the decrees on wealth, alcoholic beverages, and games of chance will not have any legal effects until a final decision is made. Consequently, the online gambling VAT is also suspended and cannot be applied during this time.
Legal Reactions and Industry Uncertainty
Industry insiders and legal professionals immediately reacted to the Court’s decision. Juan Camilo Carrasco, managing partner at Sora Lawyers, emphasized the extraordinary character of the Court’s decision in a LinkedIn publication: “This extraordinary measure draws attention to the constitutional doubts about the emergency decree. The Court does not usually take preventive measures of this kind, and it seems that the decree may have serious issues in the final evaluation process.”
Carrasco also mentioned the mixed feelings for the online gambling industry: “For an industry that is already in a complex regulatory process, this is both a relief and a source of uncertainty. Operators should be ready for different possibilities while the Court is evaluating the case.”
What Comes Next
Currently, online gambling operators are enjoying a temporary reprieve, as the proposed tax treatment is also suspended. However, this does not mean that similar initiatives cannot be proposed in the future.
As the Constitutional Court continues with the substantive review, the results will be closely followed not only by the gaming industry but also by the business community at large. The final decision will establish an important precedent in relation to the powers of the executive and taxation in the gaming industry in Colombia.
Source: SBC Noticias
