Brazilian Gambling Associations Unite to Oppose Proposed Tax Increase

In response to potential government plans to raise taxes on the gambling industry in Brazil, six major gambling trade associations have come together to voice their concerns. The proposed tax increase comes on the heels of the Senate’s approval of new advertising restrictions last week, further adding to the challenges faced by the sector.

The associations, including the Brazilian Institute of Responsible Gaming (IBJR) and the National Association of Games and Lotteries (ANJL), issued a joint statement criticizing a Senate bill that seeks to raise the financial transactions tax (IOF) rate from 0.38% to 3.5%. This significant jump in tax rate could have a substantial impact on the industry, potentially jeopardizing the viability of regulated online operators.

The government’s proposal to increase the tax burden on the gambling sector is seen as a response to offset revenue lost by revoking the IOF decree. However, the associations argue that such a move would place an unjustifiable burden on operators who already contribute significantly to the country’s economy. With existing tax rates on gross gaming revenue (GGR), PIS/Cofins tax, municipal taxes, and corporate income tax, the industry is already heavily taxed.

The associations warn that further tax increases could drive operators towards the illegal market, mirroring experiences in other countries where excessive taxation led to the expansion of unregulated gambling activities. They emphasize the importance of maintaining a balanced regulatory framework that supports legal operators and protects consumers.

As Brazil considers transitioning to a new tax system and explores possibilities for land-based legalization, the industry awaits clarity on the future regulatory landscape. The potential for casinos to be legalized could offer a new revenue stream for the government and provide a boost to the gambling sector.

In a pivotal moment for the Brazilian gambling industry, stakeholders are calling for a careful evaluation of tax policies to ensure sustainable growth and a thriving regulated market. The outcome of these discussions will have far-reaching implications for the future of gambling in Brazil.