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An increasing argument in Colombia has centered on the tax revenues produced by the online gaming industry. A recent analysis released by the Colombian financial newspaper La República shows a major discrepancy between the numbers reported by the Ministry of Finance and those expressed by the country’s largest betting operators.
The difference between the information supplied by the Colombian tax authority (DIAN – Dirección de Impuestos y Aduanas Nacionales) and the financial records made available by Asojuegos, the national association covering gambling entrepreneurs, lies at the heart of the discrepancy. Although DIAN says it has significantly lower tax revenue, Asojuegos cites a substantially greater contribution from its allied companies, which total around 70% of the industry.
Reported State Contributions from Asojuegos
Asojuegos reports that online gaming companies sent the State COP 2.4 trillion (about USD 560 million) in 2024. Member firms contributed COP 1.7 trillion (USD 397.2 million) out of this total. These statistics were categorized as follows:
COP 654.223 billion (USD 152.7 million) from Value-Added Tax (VAT)
COP 132.205 billion from income tax
COP 244.870 billion from withholding tax (retefuente)
These figures imply that the private sector makes a significant contribution to the national coffers. The official statistics, however, offer another view.
The Government’s Figures Tell Another Story
By the end of 2024, the total VAT gathered from gambling of chance and betting totaled only COP 417.384 billion (USD 97.4 million), according to the DIAN’s internal system, Cognos. Income tax revenue from the same sector totaled COP 233.934 billion. These discrepancies call into question the methodology employed to monitor tax contributions, the possible existence of unreported transactions, or systematic inconsistencies in data reporting.
Given that Asojuegos affiliates make up 70% of the whole industry, the government’s smaller numbers are challenging to match with the association’s assertions.
VAT on Deposits: An Industry Burden?
The government’s choice to impose VAT on player deposits, a policy implemented by emergency decrees during a period of internal unresthas become a major point of contention.
President of Asojuegos, Juan Carlos Restrepo, condemned the action, saying that such a tax puts an excessive burden on companies. Strictly applying VAT as decreed would result in 74% player returns, down from 96% on foreign platforms. That would make us uncompetitive, he said.
Many operators have borne the VAT expenses themselves, usually providing promotional incentives to players to help offset the tax load, hence maintaining user engagement and preventing loss of market share to foreign platforms. Restrepo called these initiatives “a massive sacrifice” that questions long-term business viability.
DIAN’s View: Retention Strategies and Strategic Marketing
Conversely, Luisa Rocío Reyes, DIAN’s director of tax management, presented. She said it is a deliberate marketing strategy, even though betting businesses are absorbing the VAT cost. She also stressed that these businesses operate as withholding agents, so enabling them to gain from tax deductions, lowering their total liability.
Reyes provided more information: 749 legal entities reported income totaling COP 330 billion over the last year, compared to 4,375 persons whose income amounted COP 339.99 billion, together yielding COP 883 billion in taxes.
A Tense Moment for Online Gambling Policy
As the government gets ready to publish its first official report on VAT revenue from online gambling platforms of the main components of the recent tax changes connected to the state of internal emergency, the timing of this discussion becomes especially pertinent.
The contradictory data has revived demands for openness and communication between public agencies and the business sector. Maintaining both competitiveness and regulatory integrity will depend on a common awareness of the actual fiscal contributions and the sustainability of new tax systems as Colombia’s online betting market develops.
Source: YogoNet
