SBC News Voice of the Sports Betting Industry
The government of Colombia will review a proposal to impose a new 19% value-added tax (VAT) on digital platforms.
The proposal has been submitted to the office of President Gustavo Petro to be considered as part of Colombia’s pending national budget.
Currently, President Petro has yet to sign off on Colombia’s budget, with deputies raising questions about the government’s expanded plans to spend 523 trillion pesos (approximately $130 billion USD) for the year 2025.
Although not yet published, Colombian news sources have reported that “economic committees have been given glances” of the VAT proposal on digital platforms.
The proposal specifically names the home-sharing platform Airbnb as a business that would be subject to the 19% VAT. Online sports betting and igaming platforms are also believed to be included under the proposal’s VAT remit.
At present, Colombia applies a tiered tax structure of 15-17% on Gross Gaming Revenue (GGR), dependent on licensed operators maintaining a return-to-player (RTP) rate above 83%.
The Colombian trade body Asojuegos has urged the government to reject the VAT charge. Its president, Juan Carlos Restrepo, cautioned that such a tax would be highly damaging to the regulated sector.
Restrepo pointed out that the additional cost would ultimately be passed on to consumers, potentially reducing operators’ RTP to around 78%. “Players will likely choose international platforms that do not impose VAT and offer the same returns as those currently provided by companies operating in Colombia,” he explained. “As a result, the funds currently collected for health purposes could end up with companies that neither pay taxes in Colombia nor operate within its legal framework.”
The budget reform proposals will be reviewed by President Petro this week before being sent to Congress for debate and approval. Petro defended the government’s budget proposal of $130 billion, arguing that the funds are needed to upgrade Colombia’s healthcare and welfare systems.
Asojuegos warned: “I think it is a seriously mistaken measure that will affect the income currently available to the health sector in Colombia because the operation of online games has been significantly increasing its resources and contributions to the health sector.”
