Colombia has revised how Value Added Tax (VAT) is applied to licensed online gambling, moving from a deposit-based system to one calculated on Gross Gaming Revenue (GGR). Announced on 31 December by the Colombian Federation of Gambling Entrepreneurs (Fecoljuegos), the reform takes effect from 1 January 2026 under an emergency fiscal decree. It represents the first formal recognition of the “mathematical reality” of gambling operations by the Colombian government.
Finance Minister Germán Ávila described the change as “a measure to restore fiscal balance without suffocating productive sectors.” He added: “We believe that in terms of VAT there is room to maintain the 19% rate while adjusting the taxable base to reflect real gaming income. This approach respects the mathematical structure of the industry, ensures fairness in taxation, and secures the revenues needed to meet our social commitments.”
From Deposits To Actual Revenue
Under the new model, the 19% VAT is applied to GGR, calculated as total bets minus prizes paid to players. This replaces the deposit-based system introduced by President Gustavo Petro’s administration in February 2025 to fund Catatumbo, a region affected by guerrilla conflict. The tax had been slated to become a permanent part of the National Budget for 2026, but it faced strong opposition from licensed operators.
Fecoljuegos highlighted the negative impact of the deposit-based system, citing Coljuegos data showing that monthly operator tax generation fell 46.6% year-on-year, dropping from COP 43.3bn (£9m) in July 2024 to COP 23.1bn (£4.8m) in 2025. Codere Online said the tax made “further investment in Colombia impossible under current conditions,” prompting a freeze on market expansion plans.
Industry Reaction And Fiscal Improvement
The federation welcomed the shift to GGR, calling it “a first step towards restoring rationality” in Colombia’s fiscal framework. Fecoljuegos President Evert Montero Cárdenas said: “This change enables the industry to abandon a state of manifest inefficiency and allows for a small but essential margin in the legal system. But it is a starting point, not an endpoint, in building a sustainable long-term model.”
The total tax on licenses under the revised system now averages around 34% of GGR, comprising 15% in concession tax and 19% VAT, excluding other domiciled taxes. While still higher than many South American markets, the adjustment is seen as restoring operational viability for licensed operators.
Montero Cárdenas stressed the need for further reform: “We are ready to continue working hand in hand with the authorities to design a model that rewards compliance and innovation. Colombia must aim for a framework that encourages private investment, supports technological progress, and strengthens formalisation — because a strong, competitive legal industry is the state’s best defence against illegality.”
The emergency decree was enacted after the collapse of the Financing Bill left a COP16.3 trillion ($4.2bn) gap in the 2026 budget. Some opposition figures have questioned the decree’s legality, suggesting potential court challenges ahead.
Source:
“Colombia accepts ‘gambling maths’ as VAT shifts to a GGR base”, sbcnews.co.uk, January 2, 2026
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