The measure, initially planned as temporary, involves the removal of the VAT exemption on gambling, in addition to two new taxes in other areas with the aim of financing the humanitarian crisis in Catatumbo.
Colombia.- From the Ministry of Finance of Colombia, it was announced that the government of President Gustavo Petro is preparing a new tax reform, similar to the one that failed last year, which would include the implementation of a 19 percent VAT on online gambling.
It is worth remembering that recently, the Executive created three new taxes temporarily with the goal of addressing the emergency in Catatumbo, a region marked by decades of armed conflict and a recent humanitarian crisis.
The three new taxes are: 19 percent VAT on online gambling; stamp duty; and a tax on the export of coal and oil. This extraordinary implementation was justified under the legal framework of internal commotion, which allows the Executive to adopt exceptional measures to ensure public order and the functioning of the State. Initially, it was said that the collection would be made for 90 days. It was a temporary measure, but it could be extended for two equal periods, with the approval of the Senate.
However, the Minister of Finance, Diego Guevara, revealed this week during his intervention at the seminar of the Anif Economic Thought Center that the taxes created in the declaration of internal commotion will be maintained through 2025. Furthermore, it will be sought to make them permanent through a new tax reform.
According to the local media El Colombiano, Guevara explained that the Executive would seek to collect at least COP12 trillion, but did not confirm the date on which the project would be presented, as they must wait to see how the other reforms progress in the Legislature.
The official revealed that in that tax project, the three taxes decreed in the internal commotion would become permanent. "The idea is to seek a consensus with Congress," he added.
Also, he explained that these three taxes would be maintained throughout 2025 and not only for the declaration of commotion, with or without tax reform. The official argued that "there is jurisprudence from the Court that allows that, in terms of income and when you need to sustain the public order of a region, you can do it much beyond the commotion, and legally there are elements to maintain them throughout the validity."
It is worth remembering that after the Executive announced the measure, alarms were raised in the Colombian gaming sector, the president of the Colombian Federation of Entrepreneurs of Games of Chance (Fecoljuegos) Evert Montero Cárdenas, requested through two letters addressed to Minister Guevara, and to the director of Dane, Piedad Urdinola, the possibility of establishing a dialogue table to analyze the figures that were used as a basis for making that decision. Additionally, in another communication through social networks, they raised the risk that the measure implies for the industry.
On the other hand, after the announcement of the implementation of the new tax, alarms were also raised in Colombian football. According to a source close to the sector consulted by the local media El Tiempo, if this tax is approved, there would be a significant reduction in investment in sponsorships in the Liga BetPlay, since betting houses, which currently invest between COP120,000m (USD28m) and COP 140,000 (USD33.5m) annually, would reduce their economic contribution.
