Colombian gambling sector at risk due to new 19% VAT

The Colombian Federation of Gambling Entrepreneurs (Fecoljuegos) has strongly criticized the government’s decision to impose a 19% value-added tax (VAT) on betting, warning that the move could drive operators out of the market.

The Colombian government has issued Decree No. 0175, temporarily removing the VAT exemption for online gambling operators under Article 420 of the country’s tax code. Instead, a 19% VAT will be applied to player deposits until December 31. The decision comes as part of emergency measures to fund government actions in response to the ongoing crisis in the Catatumbo region, where rebel violence has displaced approximately 30,000 Colombians.

However, Fecoljuegos has strongly opposed the 19% VAT, stating on 19 February that the tax is “unsustainable and unfeasible” for the industry. The organization is urging the Colombian government to reconsider, warning that the measure threatens the stability of the sector.

If operators withdraw from Colombia, the country’s health sector could face significant setbacks, as it heavily relies on the financial contributions generated by the gambling industry.

Juan Camilo Carrasco, a lawyer, mentioned:

Players will use VPNs and then play in many of those very well-known brands of the black market.

We were expecting the regulator to say, ‘Hey, this will jeopardise our income, it will jeopardise the expected collection of gaming duties that are aiming to go to the health system.’ But they have not made any statement.

Fecoljuegos reinforced these concerns, warning that the 19% VAT could drive a significant number of players to black market sites, which lack security measures and do not contribute to state revenues.