Colombia's tax reform returns, and online gambling is back in the crosshairs
On Monday 20 July, the same day Gustavo Petro delivered his final public address as president following the military parade for Colombia’s Independence Day, his government filed a new tax reform bill before Congress: the fourth of his administration, and one that once again puts online gambling operators a target.
The bill was presented that same day by outgoing finance minister Germán Ávila Plazas, alongside members of Congress, most of them from Pacto Histórico, the left-wing coalition led by Petro. It seeks to raise 21.9 trillion pesos in 2027 to close a fiscal gap that, according to the Ministry of Finance, has worsened because more than 90 per cent of the national budget consists of fixed expenditure.
A tax that had already been struck down
This is not the first time the government has tried to tax online gambling more heavily. In December 2025, President Gustavo Petro declared a state of economic emergency and issued Decree 1474, which included a 19 per cent VAT on online sports betting and online casinos.
A Constitutional Court statement, specifying that the decree covering liquor, wealth and games of chance would have no effect while a substantive ruling was pending, confirmed that the Court had suspended the decree as a precautionary measure in January 2026.
Why the Court struck it down
The Court statement went on to explain that the decree remained suspended pending a full ruling. By a vote of six to two, the Court found that the circumstances cited by the executive were foreseeable and structural in nature, and should therefore have been addressed through ordinary legislative channels rather than emergency powers that sidestepped oversight by Congress.
In other words, the gambling tax did not fall because Congress voted against the measure itself, but because the Court deemed the mechanism used to impose it, the economic emergency decree, invalid.
The debate was far from over
The ruling did not put the matter to rest; Petro had already signalled he would file a new tax reform before Congress, warning that if it failed to pass, he might declare a further economic emergency. That warning is, in essence, what materialised on 20 July.
The new bill moves the same gambling measure into the ordinary legislative process rather than governing by decree. Article 5 amends the Tax Statute so that online gambling is subject to the general 19 per cent VAT rate from 1 January 2027, replacing the consumption tax that currently applies only for 2026.
The Ministry of Finance itself made this case in the explanatory memorandum accompanying the bill filed on 20 July: applying VAT to online gambling corrects a market distortion, since without it these digital services would enjoy an advantage over physical gambling venues, which already pay it. By the government’s own estimates, this measure alone would raise 1.7 trillion pesos for the 2027 budget.
Gambling is not the only sensitive point. The reform also tightens the tax burden on occasional winnings from games of chance: the rate applied to prizes from lotteries, raffles and betting would rise from the current 20 per cent to 30 per cent. The bill proposes fixing the rate for this type of income at that new level; while it works its way through Congress, the rate in force remains 20 per cent.
The reform’s reach extends well beyond gambling. It also aims to reinstate 19 per cent VAT on concerts, sporting events and hybrid vehicles, raise taxes on fuel, cigarettes and vapes, and lower the threshold at which wealth tax becomes payable.
What is the point of filing a bill now?
Given the amount the government was unable to obtain through previous initiatives, the current finance minister defended the timing as a demonstration of fiscal restraint meant to keep the public finances balanced in 2026 and beyond. The measure does not require the new administration to enact it; starting on August 7, the new administration will be free to consider it, make changes to it, or reject it completely.
The reception has been lukewarm at best. Vice President-elect José Manuel Restrepo dismissed the initiative as unnecessary, while opposition congressmen doubt it can muster the votes to advance, not least because it lands in a Congress that, in the closing stretch of any presidential term, tends to sit with low attendance and political parties increasingly focused on the election rather than on legislative business. History offers little encouragement either: of the three tax reforms this government has attempted since 2022, only the first made it through in full.
A reform against the clock
Petro’s term ends on 7 August 2026, when president-elect Abelardo de la Espriella takes office for the 2026 to 2030 term. Of the four tax reforms the Petro government has attempted since 2022, only one, Law 2277 of 2022, has been approved. Local media has already reported that this latest bill, filed less than three weeks before Petro leaves office, faces steep odds in Congress.
What is clear is that, for the second time in seven months, Colombia’s online gambling industry finds itself back at the centre of the country’s fiscal debate, this time not by decree, but through the very route the Constitutional Court itself said should be followed: Congress.
This article was first published on the Spanish SiGMA News page on 23 July 2026.
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