The Constitutional Court of Colombia has stood by its original decision to deny President Gustavo Petro and the Humana government the grounds to implement “emergency tax decrees” without authorisation by Congress.
The decision should see the Humana government abandon its 19% VAT charge on gambling transactions that has been in-place since March of 2021.
The tax charge was brought-in via an emergency decree by the Humana government to raise taxes of specific sectors and related transactions.
The Court refused to recognise the emergency decree that sought to impose new tax measures across online gambling, alcohol, tobacco and fuel, reaffirming that fiscal changes must be formally scrutinised by Congress.
Upon further review by constitutional judges, it was determined that ‘exceptional circumstances’ cited by President Petro failed to meet the constitutional thresholds of “unforeseeability” and “exceptionality”.
As a result, Petro is once again blocked from implementing emergency taxes of raising VAT on alcohol from 5% to 19%, increasing the tax burden on financial institutions by 15% (lifting the effective rate to 50%), and applying a 19% VAT to luxury goods including yachts and high-displacement motorcycles.
Online gambling revenues were also targeted via a proposed 19% VAT. Collectively, the government aimed to raise approximately COP 11trn (€2.5bn) to address mounting fiscal and social pressures.
Petro told congress that he was ready to negotiate on certain taxes, but had no intentions of changing charges on gambling licences, viewed as a sector that should face “sin taxes”.
In its ruling, the Court also suspended the legal standing of related measures, confirming that Legislative Decrees 1474 of 2025 and 044 of 2026 will remain ineffective pending further constitutional review. The decision places firm limits on the executive’s ability to bypass legislative processes, reinforcing that budgetary reform must proceed through Congress.
Attention now shifts to lawmakers, as gambling taxation remains high on the political agenda. Colombia’s National Congress is reviewing alternative frameworks, including Decrees 0240 and 0241, which propose a 16% charge on online gambling via two mechanisms — one applied directly to operators and another levied at the point of customer deposits. The proposals also seek to extend taxation across all payment channels, including bank transfers, cash and potentially cryptocurrency, reflecting a broader effort to capture digital transaction flows.
The renewed legislative push follows the Court’s earlier rejection of a 19% VAT on online gambling based on gross gaming revenue (GGR), a central pillar of Petro’s fiscal plans. With emergency powers ruled out, the government is now pursuing conventional legislative routes to secure approval.
Fiscal pressures continue to intensify. Colombia faces a budget deficit estimated at up to COP 30trn, while tax revenues have underperformed expectations, according to DIAN data.
Policymakers increasingly view online gambling as a scalable tax base to support public spending commitments, though industry stakeholders warn that cumulative levies — particularly those targeting deposits and payment channels — could hinder sector growth and reduce long-term contributions.
Congress will now assess the technical implementation of the proposals, including whether enforcement falls under Coljuegos or central government authorities, and how compliance and reporting obligations will be structured.
For the gambling sector, while the immediate threat of emergency-imposed taxes has been removed, the direction of travel remains clear — taxation is coming, but through Congress.