Brazil's Minister of Finance Pushes for Taxation of Online Betting Sites
Fernando Haddad highlights illegality & foreign exchange evasion, as Brazil prepares to tax online betting sites to generate USD 370m-1.1bn.
The Minister of Finance in Brazil, Fernando Haddad, recently stated that the failure to charge taxes on sports betting sites results in "illegality" and the evasion of foreign exchange in the country. In an interview with UOL, Haddad emphasized that the country needs to have a system that is similar to other countries and tax the sector.
The taxation of internet gambling is a global phenomenon, and Brazil should not be an exception. The country faces an absurd evasion of foreign exchange because a lot of money goes out of the country, and there is no control because it's not a physical casino, but a virtual casino. The taxation of virtual casinos is necessary as they exist and need to be regulated.
The Federal Government intends to tax online betting to compensate for the loss of revenue with the increase in the Income Tax exemption ceiling. However, Haddad did not detail the project that is being prepared at the Ministry of Finance.
The taxation of online betting tends to provide a collection between USD 370 million and USD 1.1 billion for the government. However, the challenge in calculating the exact amount that can be obtained is what is delaying the preparation of the project, whether via a bill or via a provisional measure.
The proposal intends to tax fixed odds betting sites on predictions of the sporting result of games promoted by leagues, federations, or other sports entities. The objective is to charge bookmakers an interest on the result of sporting events such as volleyball, basketball, tennis, soccer, among others. The proposal should not include casinos or video games.
These casinos, in general, are based abroad, and it's not fair to the Brazilian population that this economic activity is exempt from taxation. The gain is all out there. The Minister of Finance is determined to ensure that the sports betting sector in Brazil is properly regulated and taxed.