Colombia’s authorities maintain the VAT rate at 19% for licensed operators but are changing its application mechanism. Starting in January 2026, the tax will be calculated based on operators' GGR rather than deposit sums.
Legal Context of the Recent Changes
The previous fiscal framework was expected to be repealed on December 31st. Industry experts voiced these assessments after the Senate’s 4th Committee turned down the state budget Financing Bill.
Central notions from the rejected draft law:
- The document proposed making the VAT rate permanent.
- The proceeds were intended to cover expenses for suppressing civil unrest in Catambo.
- The initiative proposed increasing the gambling and lottery levy on capital gains by 10% to 30%.
Following the vote’s failure, the government was forced to resort to a special regulatory mechanism. The emergency decree’s Article 2 establishes the redistribution of the 19% VAT for the entire year 2026. This measure is aimed at offsetting the budget deficit of COP 16.3 trillion (approximately $4.2 billion).
Market Reaction to the Fiscal Revision
The decision evoked mixed opinions and heated debates. Some opposition lawmakers and business representatives questioned the legitimacy of the chosen method and did not rule out the possibility of litigation involving government agencies.
Meanwhile, certified market participants responded positively to the changes. Fecoljuegos, a federation uniting Colombia’s gaming entrepreneurs, emphasised that the past VAT on deposit sums did not accurately reflect industry economics and operational logic.
In April 2025, the association claimed that the previous choice had led to a decline of around 30% in digital gross revenue. Commenting on the latest changes, the group’s representatives noted that the measures adopted for the first time ever take into account the actual financial business model.
The sphere is moving from a deeply unbalanced system, under which taxes could surpass 70% of operators' real income, to a more realistic option with a fixed deduction from GGR. The federation emphasised that it is only the initial stage of the reform. Even the updated style leaves the fiscal burden above levels typical of some international jurisdictions.
In 2026, the group’s members plan to focus on:
- balancing the fair flow of funds for the state and the sustainability of the legal sector;
- supporting tech, constructive dialogue with the government for the good of the country;
- continuing to contribute to the local economy and the health system.
Tax Model and Market Development: Prospects
The federation’s representatives believe it is important to continue discussions with the authorities and work together on a stable, long-term financial framework. The association assesses the initial review of the fiscal approach as a clear sign that the regulator has recognised the unviability of the previous format.
Further steps in this direction could create the conditions to make the state even more investment-attractive and competitive. The novel version would be aligned with international business practices.
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