Colombian iGaming Faces 19% VAT Tax Debate
Increase in Pressure for Colombia Maintaining Controversial Digital Gambling Revenue Collection Tax
Colombia's gambling industry is in a bind, grappling with a contentious 19% Value-Added Tax (VAT) on online wagers. Though originally implemented as a temporary measure in 2025, this tax on gambling deposits has sparked heated debates, with suggestions to extend it beyond its intended December 31 ending date.
The Attorney General has urged President Gustavo Petro to maintain the status quo, holding steadfast to this controversial tax. However, recent rumblings hint at its potential reversal due to concerns over escalating illegal gambling activities.
Witness the backlash against this tax, as outlined by SBC's Lucia Gando. The unfriendly financial climate, prompted by this revenue-generating measure, has sent shockwaves through the sector. Concurrently, taxing coal and gas sales at a paltry 1% and the adoption of a 3.5% self-withholding income tax for gambling firms has significantly burdened operators.
The gambling industry has responded in force, expressing concerns over the VAT's impact, as well as the strengthening of the unregulated market. The hefty 19% VAT on all betting platforms, including those accepting digital currencies, has led to a 30% decline in gross gaming revenue since its introduction.
This tumultuous tax environment has fueled anxieties that the formal market could crumble under the pressure, giving way to a booming unregulated sector. The stability of the Colombian iGaming industry appears precarious, with the future uncertain. Stay tuned for updates as this story unfolds.
The VAT tax debate in the Colombian gambling industry, particularly finance and business sectors, has sparked concerns among operators due to its negative impact on revenue and the potential strengthening of the unregulated market. Besides, the disparity in taxation between gambling, coal, and gas businesses, as well as the self-withholding income tax for gambling firms, places a significant burden on industry players. The finance and fintech sectors are closely monitoring this situation, as the 19% VAT on all betting platforms, including digital currencies, could further exacerbate the issue and potentially lead to the decline of the formal iGaming market in Colombia.
