The narrative is that the government wants to tax those with billion-dollar revenues, while the Centrão and PL want to protect them. According to an aide, the government may not succeed in passing the measures, but it will wear down right-wing candidates by continuing to push them.
This aide recalls that the Centrão avoided voting on the measures by removing MP 1303 (which would have increased taxes) from the agenda so that it would lapse.
The strategy now is to force the opposition to take a stand against those proposals. In fact, within the government, conceding in the negotiations over MP 1303 by giving up on raising the tax on bets was considered a major mistake
On Thursday (10), the PT itself presented a bill to raise taxation on 'Bets'. The PT leader in the Chamber, Lindbergh Farias (RJ), filed a bill proposing to raise the tax on 'Bets' from the current 12% to 24%. The revenue would go to social security.
“This measure is important because Brazil already has over 2 million gambling addicts, and records of public-net treatment of people with symptoms of pathological gambling increased 300% from 2022 to 2024,” says Lindbergh.
Besides the aim of raising revenue for the Lula government, the PT seeks to use these proposals to weaken the Centrão and PL, which the PT accuses of defending the interests of 'Bets' owners.
These measures will be part of a package Lula will review with his finance minister, Fernando Haddad, to compensate for the expiry of MP 1303, which would have secured around R$ 30 billion (US$5.4bn) for public coffers next year from increased revenue and expense cuts.
Raising taxes on 'Bets'and fintechs was part of the MP that expired Thursday, after the Centrão and PL defeated the government in pulling the bill from Wednesday’s session (8).
Another alternative may be to introduce a bill to tax 'Bets' retroactively. The idea would be to impose a tax and a fine on earnings collected before the sector was regulated — over the four years of former President Jair Bolsonaro’s administration.
The move would aim to repatriate bettors’ funds. Under current rules, those funds cannot be used because they are “irregular.” With this proposal, the government would claim part of those amounts as they are repatriated and regularized — a “win-win.”
Lula criticizes Congress for not taxing the rich, 'Bets' and fintechs
During the launch of a new housing credit model in São Paulo, President Luiz Inácio Lula da Silva criticized Congress’s refusal to approve taxes on the rich, fintechs, and sports betting companies.
Without naming names, Lula said there are lawmakers who vote against taxing high incomes and the digital betting sector to protect the interests of economic elites.
“We send a bill so that those earning over R$ 600,000 (US$108,000), those earning over R$ 1 million (US$180,000), fintechs, and 'Bets' pay a bit more — and they vote against it,” he said. “They prefer to protect the top floor, the penthouse of our country.”
The MP needed to be approved by last Wednesday (8) to maintain efficacy. With its removal from the agenda by the opposition, the measure expired. The original version proposed taxing billionaires, banks and 'Bets' (electronic betting firms) as a way to raise revenue.
The concept was to tax the gross revenue of 'Bets' at rates between 12% and 18%, in addition to taxing financial instruments like LCA, LCI, LCD, and interest on equity.
The initial forecast was for revenue of R$ 10.5 billion (US$1.9bn) in 2025 and R$ 21 billion (US$3.8b) in 2026. With negotiations, the projection dropped to R$ 17 billion (US$3bn). The bill also proposed R$ 4.28 billion (US$775m) in mandatory spending cuts.
Source: GMB
