Brazil postpones selective betting tax processing
The Brazilian government has internally defined the selective tax rate that will be applied to sports betting but decided to postpone sending the bill to Congress due to the presidential elections in October. According to the newspaper O Globo, there is concern that the debate over new taxes could lead to political wear and tear in the run-up to the elections, so the percentage remains confidential and could still be modified before the official presentation, with a tendency to be set at an intermediate level.
Known as the sin tax, the selective tax levies products considered harmful to health and the environment. In addition to sports betting, it will also apply to goods such as alcoholic beverages and cigarettes, with the aim that this additional burden acts as a disincentive to consumption. The creation of the tax was contemplated in the tax reform approved during the current government of Luiz Inácio Lula da Silva and is expected to start being applied from 2027.
Since the debate began on the inclusion of sports betting in the selective tax, the industry has expressed its opposition to the measure. In an interview given at the end of 2024, the president of the National Association of Games and Lotteries, Plínio Lemos Jorge, stated that the selective tax represents the main threat to the regulated Brazilian market, arguing that, even without this additional tax, the sector already faces one of the highest tax burdens in the world, exceeding 35 percent, considering all taxes that operators must pay in addition to the gross gaming revenue rate. The leader warned that the greater the burden on the regulated market, the less channeling of bettors towards legal sites and the greater the incentive for the expansion of illegal platforms. Since then, the gross gaming revenue rate has increased from 12 to 13 percent and is expected to rise to 14 percent in 2027 and 15 percent in 2028.
Tags: selective tax, sports betting in Brazil, Plínio Lemos Jorge, Brazil tax reform