Online gambling now subject to VAT in Colombia, increasing the tax burden on the sector

The Colombian online gambling market enters a new fiscal phase. Starting this week, games of chance operated online will begin paying the 19% Value Added Tax (VAT), as part of the package of tax measures adopted by the Government within the framework of the economic emergency.

The decision, formalized by decree, marks a significant shift for the digital gaming industry and has sparked a cautious reaction from the Colombian Federation of Entrepreneurs of Games of Luck and Chance (Fecoljuegos). While the federation values certain technical adjustments, it warns of the high level of fiscal pressure the sector will face.

GGR as the Tax Base

One of the points best received by the trade association is that the Executive branch has opted to calculate VAT based on Gross Gaming Revenue (GGR)—that is, total stakes minus the prizes paid out to players. This criterion discards the initial proposal to tax user deposits, which was suggested in the 2025 tax reform bill that failed to move forward in Congress.

According to Fecoljuegos, that alternative represented an "artificial base" that did not reflect the economic reality of the operation and would have driven the tax burden to unfeasible levels. According to the federation, under that scheme, taxes could have exceeded 70% of the actual revenue of legal operators.

With the new methodology, the 19% VAT is added to the 15% corresponding to exploitation rights, placing direct fiscal pressure at approximately 34%, excluding income tax.

One of the Highest Burdens in the Global Market

Despite the technical relief provided by the use of GGR, Fecoljuegos warned that the resulting tax level places Colombia among the jurisdictions with the highest fiscal burdens for online gaming internationally, well above the averages of markets considered competitive.

The trade association emphasizes that the decree should not be viewed as a final conclusion, but rather as the beginning of a dialogue to adjust the tax model without compromising the sustainability of the legal industry. Otherwise, they warn, there is a risk that regulated operators will lose ground to international and illegal platforms that do not pay taxes and lack user protection controls.

The federation insists that the sector's viability is key to maintaining formal employment, fostering technological innovation, and guaranteeing the resources that legal gaming contributes to the Colombian healthcare system.

The Fiscal Background of the Measure

The inclusion of online betting in the VAT scheme responds to the Government's need to close an estimated deficit of $11 trillion pesos within the General National Budget, following the failure of the tax reform at the end of 2025.

As explained by Finance Minister Germán Ávila, these extraordinary measures seek to ensure the continuity of essential services, address emergencies derived from natural disasters, and meet financial commitments, particularly in the health sector.

In this context, online betting—which until now enjoyed differentiated tax treatment—was incorporated under a logic of broadening the tax base and "health taxes" (impuestos saludables), applied to sectors with contributory capacity.

Looking toward 2026, the challenge for the industry will be to find a balance between the State's revenue objectives and the need to consolidate a regulated market that is competitive and sustainable in the long term.