Extension of VAT to online gaming in Colombia rejected by Fecoljuegos

In an articlepublished yesterday in SoloAzar, it was highlighted that in Colombia, the 2025 budget would include an extension in the collection of VAT to digital platforms and marketplaces, including online gambling.

This idea of levying VAT on online gaming from the Third Commission of the Colombian Senate is of concern to the Colombian Federation of Gaming and Gambling, Fecoljuegos, which claims that this would make the activity unviable.

The current VAT rate in Colombia is 19%. The proposal is likely to affect only resident platforms, creating potential tax advantages for non-resident platforms and markets. The state considers that this tax measure is necessary to help finance health and social care.

According to the association, seven years ago Colombia became a pioneer country in regulating the online gaming modality to formalise an activity that did not contribute to public finances or to the health of Colombians. Since then, 15 sports betting platforms have signed operating contracts with Coljuegos and consolidated a legal industry in the country.

He adds that online gaming operators operate in Colombia through a high-cost, technology-intensive investment scheme, where the return to the player amounts to between 90 and 95 per cent of the bets and they pay around 20 per cent in exploitation rights that are subsequently transferred for the health of Colombians, in addition to other taxes such as income tax and others.

This is a sector that generates more than 150,000 direct and indirect jobs between online gaming operators and other companies that are part of the value chain, where many are vulnerable populations, mothers who are heads of households, diverse populations or those with disabilities.

The president of Fecoljuegos, Evert Montero, affirms that the sector is currently facing a growing phenomenon of illegality framed by numerous betting platforms that do not have authorisation from the regulator, affecting not only player safety and public finances but also competing unfairly with the 15 legal platforms.

Given the above, he assures that ‘imposing new taxes on a sector that already has high costs, that has survived despite the high level of illegality and that has numerous taxes makes the activity completely unviable. It means not only putting at risk the jobs of more than 150,000 people in Colombia, but also the contribution of more than 400,000 million pesos in exploitation rights for the health of Colombians, without taking into account other taxes such as income tax’.

Finally, Fecoljuegos urges the National Government and the Congress of the Republic to find formulas to make this sector competitive, sustainable in time and completely viable and to take measures to combat the asphyxiating phenomenon of illegality in games of chance.

According to the association, it is not about imposing new taxes but about understanding the importance of the sector growing in order to increase the contributions in exploitation rights, in the generation of employment and wealth for the country. ‘From Fecoljuegos we are open to dialogue for the collective construction of a national agenda,’ he points out.