Under a cashback individual voluntary arrangement promotion, Stake will credit users with the VAT amount taken from their submitted deposits under the new measure enforced in the market in February.
The operator, which entered Colombia’s licensed market in 2023, said it wanted to reduce the impact of the new VAT measure which is set at 19% of every deposit made.
The VAT measure was first suggested last year but attempts to introduce it were stopped in December. The government reintroduced it on 12 February with emergency legislation issued in an updated bill, (Decree No 0175), that had previously eliminated online gambling’s VAT exemption. The VAT requirement came into force 22 February.
Stake general country manager in LatAm Diana Otálora said it did not want the tax to impact players’ experience with Stake.
“That’s why we have to adapt to the government’s measure regarding the 19% tax and comply with the required deadlines. Therefore, we are adopting internal measures so that our customers can continue playing without being affected by this situation,” she said in a statement on 25 February.
The operator entered the Colombian market through the acquisition of Betfair Colombia in 2023.
Colombian VAT
Colombia’s gambling trade body, Asojuegos, warned last September that the VAT could make the market “unviable” for operators and warned that players would turn to illegal markets as a result.
“If VAT is applied, the return to the player would be reduced from 93% to 71%-75%, which would cause players to migrate to illegal or international platforms that are not subject to these tax burdens,” Asojuegos president Juan Carlos Restrepo warned.
The tax has been brought in to help cover expenses related to ongoing violent disturbances in the Catatumbo region of Colombia. Roughly 80,000 people have been displaced in the region, according to the United Nations, due to armed conflict between the Colombian government and FARC-EP combatants.
Speaking to iGB earlier this month, local lawyer Juan Camilo Carrasco, a partner at Bogota law firm Asensi Advogados, said it was imperative operators were given the time necessary to both modify and recertify their systems. “It’s kind of like pushing the operators into the fence,” Carrasco explained to iGB.
“You need to collect these taxes, but you [don’t have the capability]. But if you don’t pay taxes, then you commit a crime. If you start collecting taxes after amending the system without approval of the regulator, then you’re breaching the law.”
Original article: https://igamingbusiness.com/legal-compliance/stake-to-credit-colombian-players-with-vat-bonuses-to-avoid-impact-of-new-tax/
