President Luiz Inácio Lula da Silva defended this Thursday (19) the increase in taxes for online betting houses. This statement was made during his participation in the Mano a Mano podcast.
Lula stated that the proposal includes changes to the Tax on Financial Transactions (IOF). The aim is to increase revenue from bets, fintechs and banks.
Treasury Minister Fernando Haddad presented the proposal as a form of tax compensation. According to the president, the measure would avoid cuts to the federal budget.
“Haddad’s IOF is nothing special,” Lula declared during the podcast. The program was hosted by musician Mano Brown and journalist Semayat Oliveira.
The president explained that Haddad wants to increase taxes on three specific sectors. Initially, sportsbooks would pay more income tax. In addition, fintechs and banks would also have their tax burden increased.
“Just a little bit, so we can make up for it, because every time we go beyond the fiscal framework, we have to cut the budget,” said Lula.
Congressional resistance to tax increases
The presidential statements come amid strong parliamentary opposition. On Monday (16), the Chamber of Deputies voted for the urgency of a opposing bill.
By 346 votes to 97, the deputies approved the urgent processing of PDL 314/25. Thus, the Legislative Decree Project can suspend the effects of the government decree on the IOF.
Approval allows for direct voting in the plenary of the Chamber. Therefore, the decree will not need to go through parliamentary committees.
Sportsbooks at the center of Lula government’s tax proposal
Lula defended the concept of tax justice during the interview. “We want to achieve tax justice. We want people who earn more to pay more taxes. We want those who earn less to pay less. And we want vulnerable people to pay no taxes,” the president declared.
Sportsbooks are one of the main targets of the new tax proposal. The sector has grown exponentially in Brazil and has become the focus of discussions about regulation and taxation.
Betting taxes would increase from 12% to 18% in the government’s new provisional measure (MP) starting October 1st of this year. However, associations representing the sector warn that the increase in taxes could make licensed operations unviable, as well as strengthen the irregular market.
“The proposal, in practice, penalizes those who operate legally and favors informality, compromising not only tax collection, but also public policies financed by the sector, such as sports and health,” says a note from the National Association of Gambling and Lotteries.
History of previous attempts
On May 22, the economic team announced a budget contingency of R$31.3 billion from the General Budget of the Union. Therefore, the objective was to ensure compliance with the fiscal target established in the Budget Guidelines Law (LDO).
Finally, at the time, the government proposed raising the tax rate on several financial transactions, including the IOF. However, it backed down on the same day in the face of criticism from businesspeople and parliamentarians, including some from the government’s own base.
