Key Takeaways:
Colombia’s Constitutional Court docket blocked Petro’s $3.1 billion emergency tax decree on April 9. Fecoljuegos reported a 30% on-line GGR drop after the 19% VAT was launched in February 2025. Decree 0240 named crypto deposits as taxable for the primary time below Colombian regulation.
13 Months of Government Decrees Finish With a Constitutional Wall
The courtroom dominated that Decree 1390, signed by Petro’s full cupboard final December, exceeded the president’s constitutional powers. Justice of the Peace Carlos Camargo Assís, who authored the lead opinion, referred to as the transfer an “affront to the operation of Congress” that arose from “political conflicts arising because of the refusal of legislative initiatives of the federal government.”
The ruling prevents Petro from amassing roughly $3.1 billion (12 trillion Colombian pesos) by means of emergency fiscal measures, together with the 19% VAT on on-line playing gross gaming income (GGR for brief), elevated VAT on alcoholic drinks (5% to 19%), a 50% earnings tax surcharge on monetary establishments, 19% VAT on luxurious gadgets (yachts, high-powered bikes), and revised wealth assessments.
The saga started final February, when Petro’s administration first launched a 19% VAT on on-line playing deposits as a brief emergency measure to fund the response to civil disturbances within the Catatumbo area. The Colombian Federation of Playing Entrepreneurs (Fecoljuegos) reported that the tax induced a 30% drop in on-line gross gaming income inside months, with some platforms seeing declines of practically 50% throughout deposits and participant exercise. Month-to-month transfers from the playing sector to Colombia’s healthcare system (which receives playing income by regulation) fell from $9 million (40 billion pesos) to $6.1 million (27 billion pesos) monthly.
When Petro sought to make the tax everlasting, the Senate’s Fourth Financial Committee rejected his financing regulation by a 9-4 vote in December. Quite than settle for the defeat, Petro invoked emergency powers and signed Decree 1390 earlier than Congress went into recess. The decree reimposed the 19% VAT, this time calculated on gross gaming income somewhat than deposits – a shift that Fecoljuegos acknowledged as recognizing “the true math of the enterprise,” whereas sustaining the tax remained unsustainable.
The Constitutional Court docket intervened on January 29, provisionally suspending the decree by a 6-2 vote in what authorized specialists described as an unprecedented transfer in Colombian constitutional historical past. Juan Camilo Carrasco, managing associate of Bogotá-based gaming regulation agency Sora Legal professionals, informed iGB.com that the courtroom “not often adopts preventive measures of this kind,” suggesting the decree confronted critical obstacles”. The suspension returned on-line playing operators to the usual 15% GGR tax.
Undeterred, the federal government launched a 3rd try in March, issuing Decree 0240 in response to extreme flooding in northern Colombia. This time the mechanism was a 16% consumption tax on digital playing platforms somewhat than a VAT, with the taxable occasion outlined as deposits made by way of “money, cash transfers, or cryptocurrencies” from inside or exterior Colombian territory. The decree explicitly introduced crypto-funded playing exercise inside the scope of taxation for the primary time below Colombian regulation.
The courtroom’s ultimate annulment of the unique emergency decree on the finish of March, adopted by the April 9 ruling declaring it unconstitutional, has now closed the executive-action pathway. Mixed with the sooner funds shortfall from the Senate’s rejection of the financing regulation, the entire unfunded hole in Petro’s 2026 funds exceeds 16 trillion pesos. The federal government should now pursue spending cuts of roughly 2.5% of GDP or move new laws by means of Congress.
Colombian fairness markets, nonetheless, responded positively. The COLCAP index rallied following the ruling, with traders deciphering the courtroom’s independence as a sign that Colombia’s institutional framework stays useful no matter government overreach. Authorized specialists take into account new playing tax laws unlikely earlier than the presidential election, with Petro’s prospects unsure forward of the Might 31 vote. Carrasco of Sora Legal professionals assessed that new proposals would seemingly be deferred “to a traditional legislative course of at a later date, after the 2026 elections.
Petro’s administration has reshuffled the cupboard 15 instances since taking workplace in 2022, contributing to the procedural irregularities that undermined the decree’s legitimacy. For Colombia’s licensed operators, the ruling gives short-term aid however leaves the long-term tax framework unresolved till a brand new authorities takes workplace in 2027.
