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

Colombia’s Constitutional Court has declared President Gustavo Petro’s economic emergency decree unconstitutional, ending a 13-month effort to impose value-added taxes on the country’s online gambling sector through executive action. The April 9 ruling forces the government to pursue any future gambling tax through Congress. The presidential election is now less than seven weeks away.

Key Takeaways:

The ruling prevents Petro from collecting approximately $3.1 billion (12 trillion Colombian pesos) through emergency fiscal measures, including the 19% VAT on online gambling gross gaming revenue (GGR for short), increased VAT on alcoholic beverages (5% to 19%), a 50% income tax surcharge on financial institutions, 19% VAT on luxury items (yachts, high-powered motorcycles), and revised wealth assessments.

Colombian equity markets, however, responded positively. The COLCAP index rallied following the ruling, with investors interpreting the court’s independence as a signal that Colombia’s institutional framework remains functional regardless of executive overreach. Legal experts consider new gambling tax legislation unlikely before the presidential election, with Petro’s prospects uncertain ahead of the May 31 vote. Carrasco of Sora Lawyers assessed that new proposals would likely be deferred “to a normal legislative process at a later date, after the 2026 elections.

Petro’s administration has reshuffled the cabinet 15 times since taking office in 2022, contributing to the procedural irregularities that undermined the decree’s legitimacy. For Colombia’s licensed operators, the ruling provides short-term relief but leaves the long-term tax framework unresolved until a new government takes office in 2027.