Fernando Haddad, Brazil’s Finance Minister, proceeded with a controversial tax increase on the online betting industry. He did so despite receiving a formal request for dialogue from sector representatives over a week earlier. This is according to reports of local media. The federal government raised the tax on betting company revenue from 12% to 18% on June 11, effective on October.
The decision came without any response to a June 2 letter sent by six industry associations requesting an urgent meeting with Haddad. The letter expressed deep concerns about reports of an impending tax hike and warned of unintended consequences. These include the potential strengthening of the illegal betting market.
Aside from Haddad, the groups also searched meetings with the presidents of the Chamber of Deputies, as well as three federal ministries: Civil House, Tourism, and Sports. According to local media, none granted the requests.
In their appeal, the associations argued that the increased tax burden could threaten the viability of legal operations. At the same time, it may fail to deter illicit platforms. Several groups signed the document: AbraJogo (Brazilian Association of Games and Lotteries), ABFS (Association of Bets and Fantasy Sports), AIGaming (International Gaming Association), ANJL (National Association of Games and Lotteries), IBJR (Brazilian Institute of Responsible Gaming), and IJL (Fair Play Institute).
The Ministry of Sports acknowledged the correspondence but clarified that it only has authority over match-fixing, not taxation policy. The Civil House, the Ministry of Tourism, and the Chamber of Deputies did not issue any reply.
Minister Haddad defended the measure publicly following the tax hike. This positions it as part of the plan of the government to replace revenue lost from the planned exemption of the Tax on Financial Transactions or IOF.
On social media, Haddad wrote that they are the ones taxing Bets and billionaires. They are the ones exempting the worker from income tax. The message aligned with the wider effort of the government to frame the move as socially progressive.
