Colombia’s government has introduced legislation that would impose a 19% value-added tax (VAT) on deposits into online gambling accounts, reviving a proposal that previously failed to secure congressional approval. The measure forms part of a wider fiscal package that also increases taxation on betting prizes and several other products.
Bill 477 of 2026, known as the Economic Rescue Law (Ley de Rescate Económico), was submitted to Congress by the Ministry of Finance on October 29 under President Abelardo de la Espriella’s administration. If approved, the legislation would require licensed online gambling operators to collect VAT whenever customers add funds to their accounts.
The proposal has drawn criticism from representatives of Colombia’s gambling industry, who warn that the additional financial burden could particularly affect smaller businesses. Industry organisations are preparing alternative proposals while the bill moves through the legislative process.
The latest initiative also raises questions about the government’s decision to reuse provisions from an earlier tax reform rejected by Congress in 2025. Meanwhile, the administration faces pressure to secure legislative approval as it pursues financial support from the International Monetary Fund (IMF).
Government Reintroduces Deposit-Based Gambling Tax
Article 41 of Bill 477 would amend Article 420(e) of Colombia‘s Tax Statute, making online gambling deposits subject to the general 19% VAT rate. The tax would apply when players transfer money into their accounts, regardless of whether they subsequently place bets or generate winnings.
Juan Camilo Carrasco, managing partner at law firm Sora Lawyers, identified substantial similarities between the latest proposal and the gambling provisions included in the previous administration’s unsuccessful tax reform.
Speaking exclusively to SiGMA News, Carrasco described the legislation as “a rehashed reform”, adding: “It has articles exactly the same as Petro’s reform. It gives the impression that the government did not work on the articles affecting the sector at all.”
He also questioned the prospects of the latest proposal receiving parliamentary approval, given that Congress rejected the previous version in 2025. Carrasco said the wording on online betting “is exactly the same as the reform that was not approved by Congress in 2025, which would suggest that this one would suffer the same fate”.
Colombia has already experimented with different approaches to taxing online gambling deposits. In February 2025, the government introduced a temporary 19% VAT on deposits through an emergency measure linked to the humanitarian crisis in Catatumbo, in the country’s northeast.
A subsequent emergency decree issued in January 2026 shifted the taxable base to gross gaming revenue, calculated by subtracting prizes paid from total bets. However, the Constitutional Court initially suspended the measure before ruling that the underlying state of emergency was unconstitutional because the government had exceeded its exceptional powers.
The administration subsequently issued another decree in March, reinstating a deposit-based approach through a 16% consumption tax. The latest bill would therefore restore the proposed 19% VAT rate.
Carrasco has also questioned how the provision addresses offshore gambling businesses. He said: “My opinion is that the government did not analyse the VAT article at all. We are returning to 19 per cent VAT on deposits, and the provision states that this applies to offshore operators, as if paying VAT legalised offshore operations.”
The lawyer believes the government should reconsider the taxable base during the legislative process, while Sora Lawyers expects Congress could also amend the provision.
Industry Warns of Additional Financial Pressure
Fecoljuegos president Evert Montero Cárdenas has expressed concerns about the potential consequences for Colombia’s regulated gambling market, particularly among operators with fewer financial resources.
“Colombia has built a regulatory trust that we must preserve,” said Montero Cárdenas. “This could create risks to sustainability, especially among small and medium-sized companies with less capacity to absorb new burdens.”
The proposed VAT would apply alongside existing licence fees paid by gambling operators, with those contributions already allocated to Colombia’s healthcare system.
According to estimates from the Ministry of Finance, the new deposit tax could generate approximately COP 2 trillion (€565 million) in government revenue during 2027. The administration expects annual collections to average COP 2.3 trillion (€649 million) between 2028 and 2030.
The legislation also proposes raising the tax on lottery, raffle and betting prizes from 20% to 30%. The government estimates that this increase could generate an additional COP 198 billion (€56 million) by 2028.
Consequently, online gambling customers could face two separate tax charges under the proposed framework. A player depositing COP 100,000 (approximately $30) would have around COP 81,000 (approximately $25) remaining for gambling after the 19% VAT deduction. Any subsequent winnings would face the separate 30% tax on prizes.
The government has defended the online gambling tax by arguing that digital operators should face taxation comparable to that applied to physical gambling establishments, which already pay VAT.
The package also addresses competition from unlicensed gambling platforms. Its provisions include internet service provider-level blocking of offshore websites, reflecting the government’s position that additional taxation should accompany enforcement against operators outside the regulatory system.
Congress Faces Deadline as IMF Funding Enters the Equation
The proposed gambling taxes form part of a much broader attempt to address Colombia’s deteriorating fiscal position. Bill 477 includes reductions in public spending and changes to several areas of the tax system, including VAT, income tax and corporate taxation.
The government is seeking to strengthen its financial position ahead of negotiations with the IMF over a credit facility that could offer cheaper financing than borrowing through existing market channels.
However, access to IMF funding depends on the country’s ability to demonstrate credible commitments to reducing its fiscal deficit.
Vice President José Manuel Restrepo has warned about the consequences of legislative delays. Speaking to local media, he said: “If there is no progress on this rescue law between now and the end of 2026, Colombia will enter default next year,”
The government is therefore pushing for approval before the end of 2026, although several legislative steps remain outstanding. Ordinary congressional sessions are scheduled to conclude on December 16, leaving a limited period for lawmakers to examine and potentially amend the legislation.
The latest proposal also faces a difficult legislative history. Colombia’s two previous tax reform initiatives collapsed in the economic committees during December, raising further uncertainty over whether Bill 477 can secure the necessary support before the parliamentary calendar expires.