Colombia’s Petro Forced to Seek Congressional Approval for Gambling VAT After Courts Block Emergency Decrees

Key Takeaways:

• Colombia’s Constitutional Court blocked Petro’s $3.1 cardinal exigency taxation decree connected April 9.
• Fecoljuegos reported a 30% online GGR driblet aft the 19% VAT was introduced successful February 2025.
• Decree 0240 named crypto deposits arsenic taxable for the archetypal clip nether Colombian law.

13 Months of Executive Decrees End With a Constitutional Wall

The tribunal ruled that Decree 1390, signed by Petro’s afloat furniture past December, exceeded the president’s law powers. Magistrate Carlos Camargo Assís, who authored the pb opinion, called the determination an “affront to the cognition of Congress” that arose from “political conflicts arising owed to the refusal of legislative initiatives of the government.”

The ruling prevents Petro from collecting astir $3.1 cardinal (12 trillion Colombian pesos) done exigency fiscal measures, including the 19% VAT connected online gambling gross gaming gross (GGR for short), accrued VAT connected alcoholic beverages (5% to 19%), a 50% income taxation surcharge connected fiscal institutions, 19% VAT connected luxury items (yachts, high-powered motorcycles), and revised wealthiness assessments.

The saga began past February, erstwhile Petro’s medication archetypal introduced a 19% VAT connected online gambling deposits arsenic a impermanent exigency measurement to money the effect to civilian disturbances successful the Catatumbo region. The Colombian Federation of Gambling Entrepreneurs (Fecoljuegos) reported that the taxation caused a 30% driblet successful online gross gaming gross wrong months, with immoderate platforms seeing declines of astir 50% crossed deposits and subordinate activity. Monthly transfers from the gambling assemblage to Colombia’s healthcare strategy (which receives gambling gross by law) fell from $9 cardinal (40 cardinal pesos) to $6.1 cardinal (27 cardinal pesos) per month.

When Petro sought to marque the taxation permanent, the Senate’s Fourth Economic Committee rejected his financing instrumentality by a 9-4 ballot successful December. Rather than judge the defeat, Petro invoked exigency powers and signed Decree 1390 earlier Congress went into recess. The decree reimposed the 19% VAT, this clip calculated connected gross gaming gross alternatively than deposits – a displacement that Fecoljuegos acknowledged arsenic recognizing “the existent mathematics of the business,” portion maintaining the taxation remained unsustainable.

The Constitutional Court intervened connected January 29, provisionally suspending the decree by a 6-2 ballot successful what ineligible experts described arsenic an unprecedented determination successful Colombian law history. Juan Camilo Carrasco, managing spouse of Bogotá-based gaming instrumentality steadfast Sora Lawyers, told iGB.com that the tribunal “rarely adopts preventive measures of this type,” suggesting the decree faced superior obstacles”. The suspension returned online gambling operators to the modular 15% GGR tax.

Undeterred, the authorities launched a 3rd effort successful March, issuing Decree 0240 successful effect to terrible flooding successful bluish Colombia. This clip the mechanics was a 16% depletion taxation connected integer gambling platforms alternatively than a VAT, with the taxable lawsuit defined arsenic deposits made via “cash, wealth transfers, oregon cryptocurrencies” from wrong oregon extracurricular Colombian territory. The decree explicitly brought crypto-funded gambling enactment wrong the scope of taxation for the archetypal clip nether Colombian law.

The court’s last annulment of the archetypal exigency decree astatine the extremity of March, followed by the April 9 ruling declaring it unconstitutional, has present closed the executive-action pathway. Combined with the earlier fund shortfall from the Senate’s rejection of the financing law, the full unfunded spread successful Petro’s 2026 fund exceeds 16 trillion pesos. The authorities indispensable present prosecute spending cuts of astir 2.5% of GDP oregon walk caller authorities done Congress.

Colombian equity markets, however, responded positively. The COLCAP scale rallied pursuing the ruling, with investors interpreting the court’s independency arsenic a awesome that Colombia’s organization model remains functional careless of enforcement overreach. Legal experts see caller gambling taxation authorities improbable earlier the statesmanlike election, with Petro’s prospects uncertain up of the May 31 vote. Carrasco of Sora Lawyers assessed that caller proposals would apt beryllium deferred “to a mean legislative process astatine a aboriginal date, aft the 2026 elections.

Petro’s medication has reshuffled the furniture 15 times since taking bureau successful 2022, contributing to the procedural irregularities that undermined the decree’s legitimacy. For Colombia’s licensed operators, the ruling provides short-term alleviation but leaves the semipermanent taxation model unresolved until a caller authorities takes bureau successful 2027.