Brazil gaming tax rise enters force
The legislative amendment will introduce a phased increase in gaming tax over over the coming three years.
Brazil.- The increase in gaming tax for online betting in Brazil has come into force after president Luiz Inácio Lula da Silva sanctioned Complementary Law No. 224.
The amendment introduces a phased increase in the tax rate on gross gaming revenue. The rate will rise from 12 per cent in 2025 to 13 per cent in 2026. Further hikes will see the rate will increase to 14 per cent in 2027 and 15 per cent n 2028.
The objective is to balance taxation with the growth of the sector, which is already one of the five largest in the world following he launch of regulated online betting a year ago.
Another legislative change makes banks and payment providers responsible for the financial transactions of unlicensed betting operators. The government will notify financial entities and, if they continue to allow illegal transactions, they will be ordered to collect the corresponding taxes. The government also intends to take action against both physical and legal persons who advertise unlicensed betting.
Companies in the igaming sector in Brazil have expressed concern about what they consider to be a high tax burden. There are at least three other projects currently in the federal senate that aim to further amend taxation, including the Anti-Faction Bill, which proposes a 15 per cent tax on player deposits.
“Sudden changes in regulations – especially in the tax field and in advertising – create legal uncertainty and open space for the clandestine to advance even more,” argues André Gelfi, director and co-founder of the Instituto Brasileiro de Jogo Responsável (IBJR), one of the institutions that represents the online gaming sector in the country.
“Proposals like CIDE-Bets are an example: to tax the bettor, the project would create a direct disincentive to the legal market and, consequently, a stimulus to the clandestine – or that it’s a shot that doesn’t work,”
“When the tax burden increases disproportionately, the licensed operator loses competitiveness and the bettor ends up migrating to illegal sites, where there is no guarantee. Likewise, poorly calibrated adjustments in advertising can restrict communication that is within the law, while the clandestine continues to make aggressive propaganda on social networks,” adds Gelfi.
