Gustavo Petro faces his biggest setback as President of Colombia, as the Humana government has been ordered to repay ‘emergency taxes’ deemed to have been applied unconstitutionally.
Latest developments from the Constitutional Court of Colombia see judges unanimously agree that taxes charged by the Humana government, including a 19% VAT levy, must be reimbursed to affected parties.
The decision follows last week’s annulment of ‘emergency taxes’ authorised by President Petro in 2025, which were rejected because the executive failed to meet constitutional thresholds for invoking emergency powers.
It is reported that the Humana government will face a COP 25bn (€5.5m–€6m) liability, primarily linked to the 19% VAT applied to online gambling and alcohol purchases during the period in which the decree was in force.
Imposed since March 2025, the 19% VAT charge was long rejected by Colombia’s online gambling sector as an overreach by Petro, designed to fund welfare and healthcare commitments tied to the 2026 Budget.
Through these emergency powers, Petro sought to raise between COP 11 trillion and COP 16.3 trillion (€2.5bn–€3.8bn). The setback to these measures is now viewed as a critical juncture for the Humana government, particularly as political pressure builds ahead of Colombia’s presidential election on 31 May.
The period of the 19% VAT charge has significantly disrupted Colombia’s online gambling market. Foreign operators curtailed investment in response to the executive order, with Codere stating that it would not commit further capital to Colombia until regulatory conditions stabilised.
Industry trade bodies Asojuegos and Fecoljuegos lambasted the Humana government’s approach, as DIAN tax receipts from gambling reportedly declined by around 30% following the VAT’s introduction. At the same time, regulator Coljuegos signalled its first shortfall in funding allocations for public health and education derived from gambling licence revenues.
Under the ruling, Colombia’s tax authority (DIAN) has been instructed to establish mechanisms to return funds collected between late December 2025 and January 2026. However, the practical recovery of these funds remains uncertain, as claimants must demonstrate that they directly bore the cost of the tax, placing a significant administrative burden on individuals.
Crucially, the Court introduced a distinction that significantly limits the overall financial impact of the ruling. Funds collected through tax benefit schemes – estimated at approximately COP 1.6 trillion (€350m–€400m) – will not be returned. These payments relate to prior tax obligations, where around 175,000 taxpayers voluntarily settled outstanding debts under discounted terms on penalties and interest. As such, the Court deemed these payments to be “legally consolidated”, allowing the government to retain the majority of revenues collected during the decree’s enforcement.
The Court maintained that the emergency measures violated constitutional principles of “unforeseeability” and “exceptionality”, reinforcing that fiscal policy—particularly taxation—must be subject to scrutiny and approval by Congress. As such, related decrees remain ineffective, marking a firm limitation on the executive’s ability to bypass legislative processes.
Despite the repayment order, analysts expect that only a fraction of the COP 25bn will ultimately be reclaimed, as Colombia’s “requested right” system requires taxpayers to initiate claims rather than receive automatic refunds.
For Petro, the ruling represents not only an immediate fiscal setback but also a structural blow to his broader tax agenda. With emergency powers ruled out, the government must now pursue conventional legislative routes, as Congress continues to debate alternative frameworks to tax online gambling and other sectors.
