Constitutional court rejects tax hike in Colombia

Summary

Colombia’s Constitutional Court has provisionally suspended Decree 1390 of 2025, the government’s economic and social emergency order that would have raised 16.3 trillion pesos (about US$4.465 billion) to complete the 2026 national budget. The suspension is temporary while the Court examines the decree’s constitutionality; presiding magistrate Carlos Camargo warned the measure could cause “irreparable damage.”

The decision pauses President Gustavo Petro’s emergency tax measures — marking the first time the Constitutional Court has overruled a presidential order in Colombia’s history. The move follows the Senate’s rejection in November of Petro’s tax reform, which included making the 19% VAT on online gambling permanent. After the reform failed, Finance Minister Germán Ávila announced the government would pursue taxes and adjustments via emergency decrees to cover the fiscal shortfall.

Key Points

The Constitutional Court provisionally suspended Decree 1390 of 2025, which declared a national economic and social emergency.
The decree aimed to raise 16.3 trillion pesos (~US$4.465bn) to close the 2026 budget gap.
Presiding magistrate Carlos Camargo flagged potential “irreparable damage,” prompting the provisional suspension.
This is the first time Colombia’s Constitutional Court has overruled a presidential order.
The move follows the Senate’s rejection of President Petro’s tax reform in November, which included the 19% VAT on online gambling.
Finance Minister Germán Ávila had said the emergency measures would include significant taxes affecting wealth and strategic sectors to plug the fiscal deficit.

Why should I read this

Because this is a big constitutional check on the Executive — and it matters right now. It pauses a major revenue plan, could reshape Colombia’s 2026 budget, and affects sectors (including online gambling) that were in the firing line. We’ve read the dry bits so you don’t have to; if you work in Colombian policy, finance or gaming, keep an eye on the Court’s final ruling.

Author style

Punchy: The Court’s move is historic and immediate — a real blow to the government’s emergency tax route. This isn’t just legal theatre; it has practical consequences for the budget, investors and regulated industries. Read the details if you need to act or advise.