Colombia proposes 19% VAT on gambling under recovery bill

Colombia's government filed Bill 477 of 2026 with Congress on 29 October, proposing a 19% VAT on the circulation, sale or operation of games of chance, including online betting. The bill, part of the government's Ley de Rescate Económico, was presented by vice-president José Manuel Restrepo, finance minister Miguel Gómez and acting justice and interior minister Iván Cancino. It must now be debated by Congress, where legislators may amend the gaming articles and the rest of the tax measures.

Article 41 of the bill sets the general VAT rate at 19% for games of chance, with traditional lotteries excluded. It defines monthly tax bases in Unidades de Valor Tributario (UVT) by game type: 40 UVT per slot machine, 580 UVT per gaming table and six UVT per bingo seat. For online betting, the tax base would be calculated on users' deposits in money or cryptoassets, divided by 1.19.

The government aims to raise about COP40bn (US$12.6m) through the reform and to contain growth in public debt, according to figures cited by the executive. The bill also includes changes to income tax, the removal of certain tax benefits and a plan to cut state spending. The general VAT rate would stay at 19%, but the reform would widen the set of goods, services and operations covered; it also proposes changes for alcoholic drinks and beer, imports and sales of certain vehicles, motorcycles and electrical equipment, and the removal from 2028 of the reduced 5% VAT rate for goods and services currently under that regime.

A previous tax reform bill presented by the executive failed in Congress in December 2025. It had sought, among other measures, to raise taxes on online betting houses and to support the 2026 national budget with an estimated COP16.3 trillion (US$4.3m) in revenue. The Senate's Fourth Commission rejected it with nine votes against and four in favour. A 2024 tax reform attempt under president Gustavo Petro also failed.

The 19% VAT on gambling had been resisted by the sector both in the earlier bill and through implementation by decree in February 2025, which the government justified under the legal framework of internal disturbance. The sector warned of a fall in tax revenue that could deepen, affecting resources allocated to health. According to Fecoljuegos, the Colombian federation of gaming entrepreneurs, real operating income fell 32% between March and June 2025.

The executive later issued Decree 1474 of 2025, which set a new tax scheme on wealth, alcoholic drinks and online games of chance. Colombia's Constitutional Court then ruled unconstitutional the economic emergency decree issued by Petro's government in late December 2025, which had included, among other tax measures, the 19% VAT on gross gaming revenue of internet-operated games. The new decrees under the economic emergency had taken effect on 1 January 2026; under that decree, online operators would have been subject to 19% VAT applied to gross gaming revenue.