Brazil to Regulate Online Gambling
Brazilian government plans to tax online casinos and sports betting to compensate for income tax changes.
The Brazilian Minister of Finance, Fernando Haddad, announced on Wednesday that the Federal Government will regulate online games in March to collect income and compensate for the changes made in the Income Tax (IR). The move will cover online casinos and sports betting companies, and is aimed at taxing electronic games that do not currently pay any tax and generate significant amounts of revenue for the country.
The regulation of online gambling is expected to generate billions of reais, according to Haddad. However, the exact figures are still being estimated by the Internal Revenue Service and the Secretariat of Economic Reform. The model is ready, but a more precise estimate is needed.
The announcement comes after President Lula's announcement that in May, the income tax exemption for those who collect up to 2,640 reais per month will be increased. This measure will generate a drop of 3.2 billion reais in public coffers in 2023 and 6 billion reais in 2024.
Haddad emphasized the need for the taxation of online games to compensate for the drop in revenue resulting from the increase in income tax exemption. "We will regulate (online gambling). We readjusted the IR (Income Tax) table, and this generated a small loss in collection. We will compensate with the taxation of these electronic games, which do not pay any tax and take a fortune of money from the country," he said in an interview with the portal UOL.
President Lula is in favor of the regulation of online games and the taxation of electronic games, according to Haddad. "In March, we will regulate (the items). We will send it to the Civil House, and obviously, the ministries involved will be called, but it is a prerogative of the Treasury. I have already talked to President (Lula) about it, and he is in favor of it. All over the world, (electronic) games are taxed," he said.