Colombia proposes 19% VAT on betting deposits

The Colombian government has proposed charging 19% VAT on every deposit made into an online betting account. The proposal is part of a broad tax reform aimed at improving the country's fiscal position.

The package also includes raising the tax on prizes from lotteries, raffles and betting winnings from 20% to 30%. Evert Montero Cárdenas, head of Fecoljuegos, said these measures would hit small and medium-sized operators hardest. Montero Cárdenas said the regulatory trust the country has built must be protected, and that companies with a lower capacity to absorb new burdens could face sustainability risks.

The measures are included in Bill 477/2026, the Economic Rescue Law (Ley de Rescate Económico), which the Ministry of Finance submitted to Congress on Thursday (October 29). The bill provides for deep cuts in government spending and rewrites much of the tax code, covering VAT, income tax and corporate tax rates.

According to the ministry's estimate, VAT on online deposits would bring in 2 trillion COP (565 million euros) in 2027. For 2028 to 2030, an annual average of 2.3 trillion COP (649 million euros) is projected. The increase in the prize tax is expected to generate an additional 198 billion COP (56 million euros) through 2028. This tax, to be added on top of the license fees operators pay, is money already earmarked for the health system.

As justification, the government points out that physical betting venues already pay taxes and that online betting should be brought to the same level. According to the government, the additional tax should move forward together with action against unlicensed operators. The bill also includes a provision for blocking foreign websites at the internet service provider level.

The government wants the bill approved by the end of the year. Vice President José Manuel Restrepo told the local press that if progress on the rescue law is not made by the end of 2026, Colombia will default next year.