A provisional measure (MP) can make international bookmakers obliged to have a head office in the national territory in order to pay more taxes. The MP is being planned by the Federal Government.
Palácio do Planalto estimates that betting in a virtual environment generates at least R$ 2 billion per year. A large part of this amount goes outside the country as this lottery business is mostly operated by international companies.
And because of that – and to balance the equation – the government wants to collect more taxes from companies, forcing them to have an office in the country.
Bookmakers´s taxes
Since 2021, President Jair Bolsonaro has sanctioned a law that provides for the collection of taxes on transactions carried out on betting sites. Part of the total revenue minus the premiums paid to players is already destined for the education and public safety sectors.
The government estimates that the tax on these companies could be even higher. Today, 95% of the money raised stays with the bookmakers to cover their operation and maintenance costs.
But if these companies were headquartered in the country, they would have to pay, at a minimum, the following fees:
- Corporate Income Tax (IRPJ);
- Social Contribution on Net Income (CSLL);
- Social Integration Program (PIS);
- Contribution to Social Security Financing (Cofins).
Discussions about the possible new MP
Civil House Minister Ciro Nogueira and Bolsonaro discussed the details of the proposal in a meeting with representatives of the Evangelical Congressional Bench at the end of May. Lawmakers are opposed to all forms of gambling, but consented to the government’s plan because they understood that it would be very difficult to wipe out sports betting sites in the country.
“We understand that, since it exists and as we have no way of preventing it, it should be legalized and taxed. As we cannot control websites outside the country, as we do not have legislation that can decide on the jurisdiction of other countries, then the best thing is to solve it this way: taxing”, said deputy Sóstenes Cavalcante (PL-RJ), leader of the bench, to R7.
As much as they accepted the Executive’s idea, parliamentarians expressed concern about the possibility of the wording of the provisional measure being changed in Congress to include other types of games of chance, such as casinos, bingos and animal games. To avoid this problem, Bolsonaro guaranteed that the rapporteur of the matter will be with an evangelical deputy.
“I am against any and all games of chance, including this one [online sports betting]. But as it already exists, if it’s just taxation, I don’t see it with a bad eye. As long as it doesn’t go beyond the limits of this game, then I think it’s unfair. What we don’t want is for a situation like this to be taken advantage of and casinos, bingo and other things to be approved,” said Sóstenes.
Despite the interest in collecting more taxes from bookmakers, Bolsonaro indicated that the provisional measure should only be sent to the National Congress after the October elections, to prevent the issue from falling into oblivion due to the electoral process.
