Colombia tax reform proposes VAT hike on fuel and new digital sales tax

The outgoing Colombian government presented a third version of its tax reform, seeking to raise about 21 trillion pesos in revenue. Key measures include increasing the VAT on gasoline from 5% to 10% in 2027 and to 19% in 2028, lowering the wealth‑tax threshold, making the VAT on gambling permanent, extending VAT to virtual purchases that were previously exempt, and raising excise taxes on alcohol and cigarettes.

The reform is intended to help meet the fiscal deficit reduction pledged in the medium‑term fiscal framework, but analysts note that with a new administration taking office, the likelihood of parliamentary approval is low.