Itaú‘s economic team has proposed new sources of federal revenue in light of the IOF cuts, suggesting taxing sports betting and cryptocurrencies. The National Association of Games and Lotteries (ANJL) has already spoken out against the proposal, arguing that the regulated sector has an adequate tax burden.
Mario Mesquita, the bank’s chief economist, led the presentation of the proposals. The institution sees these measures as a way to offset losses from the Financial Transactions Tax.
Itaú’s proposals to increase revenue
Pedro Schneider, an economist at Itaú, stated: “would be to adopt measures that attempt to reduce negative externalities for society, such as gambling”. The bank argues that there is room to increase taxation in the sector.
The suggestion coincides with statements by Aloizio Mercadante, president of BNDES. Earlier this week, he publicly proposed increasing taxes on betting.
Mercadante stated: “The Minister [of Treasury, Fernando] Haddad has to deliver the fiscal budget. It is his responsibility. So, he has to say what the alternative is. I am already making a public suggestion here: let’s increase taxes on betting, which are eroding people’s finances. With this, we could reduce, for example, the impact of the IOF and create an alternative.”
Cryptocurrencies also enter the debate
Itaú suggests taxing cryptocurrencies to correct tax distortions. Digital currencies were left out of the recent IOF changes.
Mesquita explained: “The ideal would be to have no IOF, but it doesn’t seem to make sense to leave this segment exempt given that it will tax the others.”
Schneider added: “The ideal compensation on the revenue side is to return to an agenda of reducing distortions and inefficiencies, as in the case of cryptos, which are not taxed, but travel credit cards are, sending money is.”
ANJL contests betting proposal
The National Association of Games and Lotteries (ANJL) expressed concern about the statements. The entity classified the suggestions as measures without economic basis.
According to ANJL, the regulated sector already has a significant tax burden. Companies pay 12% of Gross Gaming Revenue in addition to traditional taxes.
The association highlighted that operators pay a concession fee of R$30 million. Adding up all taxes, the total burden reaches approximately 42%.
Regulated betting sector figures
The regulated market is expected to generate R$20 billion in taxes annually. This estimate comes from a survey conducted by ANJL itself on the sector.
The Treasury published an ordinance in February establishing inspection fees. Authorized companies must comply with these obligations to operate in Brazil.
ANJL projects the creation of 60,000 jobs in five years. The amount collected tends to increase as new operators receive authorization.
Allocation of collected resources and fiscal adjustments beyond taxation
Betting taxes are specifically earmarked for social areas. A significant portion goes to entities within the National Sports System.
The Ministry of Sports and state secretariats receive resources. Sports confederations also benefit from this revenue.
ANJL argues that the Brazilian model serves as an international reference. The efficient allocation of resources serves the public interest.
Itaú also proposes adjustments to public spending. Schneider pointed out inefficiencies in current government spending.
The economist said: “Brazil has the lowest unemployment rate in a long time, but spending on unemployment insurance is not at its lowest level in a long time. State-owned companies dependent on the Treasury spend R$30 billion a year. We have inflation of 4.5%, 5% in recent years and the salary adjustment for civil servants has been 9% for two years.”
ANJL reiterated its willingness to engage in dialogue with financial institutions. The association seeks to contribute to a qualified debate on positive economic solutions.
