The Colombian gambling industry will be watching the first moves of the new administration on Monday (August 8) when Gustavo Petro and his Cabinet are sworn into office.
Petro, the country’s first leftist President, promised during his campaign to implement widespread tax reforms that reportedly will extend to increases in taxes applied to gambling winnings.
His broader plans have alarmed foreign investors, as he steers the country away from fossil fuels and toward agriculture, which in turn has sparked fears of capital flight.
Petro’s plan to implement social policies such as free higher education and universal basic income for single mothers will be paid for by his new tax plan, which will reportedly be a 50trn peso reform ($11.5bn), should it pass Congress.
Last week, it was reported that the reforms would affect the "occasional earnings" of Colombians, which include winnings from lotteries, casino games, and other bets and prizes. The current tax rate applied to gambling winnings is 20 percent, but the new administration is rumoured to be increasing it to 35 percent.
In response to widespread reports, incoming finance minister José Antonio Ocampo shot down the rumours in a July 31 post on Twitter, stating: “Let it be clear: I have NOT announced this tax.”
The rumours came from an interview that Ocampo gave to Blu Radio, where he stated that salaried employees pay more taxes. In contrast, those that pay tax on occasional earnings in a higher-income bracket are taxed at around 10 percent overall.
The same percentage increase to be applied to gambling winnings and other earnings is still unknown but is expected to be unveiled as early as next week.
Colombia is seen within the global gambling industry as a leading example of successful policy and regulation in Central and South America, thanks in part to its framework for online gambling being established in 2016.
Gambling officials from neighbouring Peru are currently in the midst of a three-day visit to Colombia until Friday (August 5) to learn from regulatory body Coljuegos in the wake of passing its own legislation which legalised online gambling and sports betting.
Yuri Guerra Padilla, the head of controls and sanctions at the General Directorate of Casino Games and Slot Machines, is currently in Bogotá on behalf of the Peruvian Ministry of Foreign Trade and Tourism (MINCETUR) to observe standards and protocols.
Petro’s plan to tax winnings comes at a time of growth for the gambling industry in the country. Coljuegos’ latest accountability report, which covers November 2021 until June 2022, found that total collections from gambling grew 14 percent in the first half of the year, or the equivalent of $89.3m, while online gambling collections rose 30 percent.