After the government introduced a tax rise on the sector, the gambling industry in Brazil is voicing its concerns.
The Brazil betting sector is facing a 50% hike in operator gambling tax. This could raise the rate to 18% of GGR. Stakeholders are extremely concerned. They fear the increase could deal a serious blow to the licensed industry’s fight against the illegal market.
Head of legal of BetMGM of Brazil, Eduardo Ludmer, tells iGB that operators don’t want to be investing in a country they agreed to pay BRL30 million to enter. They agreed to invest hundreds of millions into this venture and then six months down the road they just change the rules of the game without asking you.
ANJL and IBJR, gambling trade bodies, banded together and condemned the government’s provisional measure as unacceptable after the government announced it earlier in June.
Executive director of the Brazilian Institute of Responsible Gaming, Fernando Vieira, adds his concern. He says that if Brazil goes in this direction, it sends a message. The message is that rules can be changed at any time. It’s not reasonable to come and start to change everything after only five months.
He also said it would send a message to the world. The message is that Brazil is a complicated place to do business. There’s no legal certainty in Brazil for the business.
The Brazilian government enacted a provisional measure in June to raise the tax rate. This move is part of a broader effort to reduce the government’s budget deficit.
Set out in May, the proposal involves upcoming changes to Brazil’s tax system. It includes a sharp increase in the financial transactions tax (IOF), raising the rate from 0.38% to 3.5%.
The IOF applies to variety of foreign transactions including loans, currency exchange, insurance, as well as investments. It remains a major source of federal tax revenue.
