Colombia’s gambling sector has been jolted by plans to lock in VAT on online gaming platforms, as part of an on-going divide on tax reforms aiming to raise billions from “targeted sectors”.
During an interview with La República on the government’s tax agenda, Luis Eduardo Llinás, acting director of Colombia’s National Tax and Customs Directorate (DIAN) confirmed that DIAN has formally advised the Ministry of Fiance to maintain the 19% VAT levy on deposits made to licensed online gambling platforms as a permanent measure.
“Let’s be clear: online gambling is no longer a niche market, it’s a multi-billion peso industry with clear fiscal obligations,” Llinás said. “This is not about penalising innovation. It’s about tax justice and consistency. The sector has matured, and its contributions to public finance must reflect that.”
Temporary Fix to Fiscal Pillar
The VAT charge on gambling transactions, which was originally introduced in Decree 175 of 2025 as a temporary emergency measure. Applied abruptly to all deposits made on licensed platforms, the tax helped support humanitarian relief and public security efforts in the volatile Catatumbo region, where a guerrilla conflict had destabilised communities.
That decree also included a 1% levy on coal and gas sales, and a 1% stamp duty on large securities transactions, forming a triple-tax structure designed to reinforce President Gustavo Petro’s COL$523trn (€120bn) social agenda.
While the VAT on gambling deposits was scheduled to expire on 31 December 2025, Llinás made it clear that DIAN views this measure as central to long-term revenue policy.
“We’ve demonstrated that the VAT on gambling is administratively viable, legally sound, and financially productive,” he said. “Rolling it back would not only weaken our fiscal base, but send the wrong message — that certain industries are exempt from contributing fairly.”
VAT storm brewing
Despite the support from DIAN and the Finance Ministry, the tax has stirred political tension within Petro’s own governing coalition. Critics argue that the levy could undermine Colombia’s digital economy, damage licensed operators, and drive consumers toward unregulated platforms — precisely the scenario the regulatory framework aims to avoid.
“The argument that taxation threatens innovation is a distraction,” Llinás said. “We’re not stifling the sector — we’re formalising it. And if operators cannot remain solvent while contributing a standard VAT, then the business model deserves scrutiny, not protection.”
He doubled down on the government’s broader objective: levelling the fiscal playing field between traditional and digital sectors.
“We’re not asking online gambling firms to pay more than anyone else — we’re asking them to pay their fair share. That’s a principle, not a negotiation.”
Ultimately, the final decision may fall to President Petro, who faces mounting pressure to unify his fractured coalition. Disputes over taxation, social spending, and economic competitiveness have exposed deep rifts across the administration, making the 2025 tax reform a flashpoint.
Budget will show government’s cards
The Ministry of Finance is expected to publish the full draft of the Tax Budget Proposal by the end of July. Congressional debate is slated for the second half of the year. For regulated industries like gambling, the next legislative cycle will be critical in shaping their long-term tax obligations.
In parallel, DIAN is ramping up enforcement across a range of sectors. Llinás pointed to virtual asset service providers, e-commerce platforms, and energy companies as major contributors to Colombia’s $72bn tax evasion gap.
“There’s no room left for passive enforcement,” he said. “We are moving decisively — not just through regulation, but through technology, audits, and direct action. Every peso matters.”
A cornerstone of that modernisation is the phasing out of DIAN’s Muisca tax system by December 2028, a project Llinás described as “non-negotiable” in a digital economy. The upgrade will include real-time invoicing, AI-powered audit tools, and integrated national oversight.
“Our fiscal system must be as dynamic as the economy it governs. Outdated platforms mean lost revenue — and we can’t afford that.”
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