SÁB 18 DE MAYO DE 2024 - 14:56hs.
Publication of presidential decree is iminente

R7: Government wants to force foreign bookmakers to be headquartered in Brazil

Newspaper R7 reports today (2) from Brasilia that the federal government plans to oblige foreign companies that manage sports betting houses over the internet and provide the service in Brazil to have a head office in the national territory so that they pay more taxes. The obligation would be included in the text of the presidential decree that will regulate the market, whose publication is imminent. The government estimates that operations involving betting in the virtual environment move at least R$ 2 billion (US$ 420m) per year.

Currently, most of this amount goes outside the country, since this lottery activity is explored by companies from abroad. To balance this equation, the government wants to collect more taxes from the operators. Hence the idea of requiring them to have an office in the country.

Since last year, a law sanctioned by President Jair Bolsonaro provides for the collection of taxes on operations that are carried out on the websites of bookmakers. A portion of the gross revenue minus the prize paid to gamblers is already earmarked for education and public safety.

The government assesses that taxation on these companies may be even higher. Today, 95% of what is collected stays with the operators of the bookmaker to cover operating and maintenance expenses.

With a head office in Brazil, companies would have to pay, at a minimum, the Corporate Income Tax (IRPJ), the Social Contribution on Net Income (CSLL), the Social Integration Program (PIS) and the Contribution to Social Security Financing (Cofins).

President Bolsonaro and the Minister of the Civil House, Ciro Nogueira, gave details of the proposal in a meeting with deputies from the evangelical bench of Congress at the end of May. Lawmakers from that political wing are opposed to any form of gambling, but they agreed with the government's plan because they understood that it would be very difficult to end sports betting sites in the country.

We understand that, since it exists and as we have no way of preventing it, it should be legalized and taxed. As we have no way of controlling websites outside the country, as we do not have legislation that can decide on the jurisdiction of other countries, then the best thing is to solve it this way: taxing," said deputy Sóstenes Cavalcante (PL-RJ), leader of the bench, to R7.

As much as they accepted the Executive's idea, parliamentarians expressed concern about the possibility of the wording of the provisional measure being changed in Congress to include other types of games of chance, such as casinos, bingos and jogo do bicho. To avoid this problem, Bolsonaro guaranteed that the rapporteur of the matter will be with an evangelical deputy.

I am against any and all games of chance, including this one [online sports betting]. But as it already exists, if it's just taxation, I don't see it with a bad eye. As long as it doesn't go beyond the limits of this game, then I think it's unfair. What we don't want is to take advantage of a situation like this and to approve casinos, bingos and other things,” said Sóstenes.

Source: Augusto Fernandes – R7