The hearing was set for 2:30 PM and would have marked the first formal meeting of the joint committee, chaired by Senator Renan Calheiros and reported by Congressman Carlos Zarattini, to discuss Provisional Measure 1,303. The measure sets new rules for financial investments and increases the tax on ‘Bets’ by 50%. It establishes that sports betting operators and online gaming platforms must pay an 18% tax on GGR, up from the 12% previously set by law.
The MP was issued in June and standardizes the Withholding Income Tax (IRRF) rate at 17.5% on financial returns, eliminating the progressive table previously applied to fixed-income investments. It also imposes a 5% tax on funds that were previously exempt, such as LCI, LCA, real estate funds, and agribusiness funds.
With the tax hike, sports betting and online gaming companies will face a tax burden exceeding 55%, which industry organizations argue is unsustainable. Associations warn that some companies may withdraw from the Brazilian market, while others still awaiting authorization from the Secretariat of Prizes and Betting (SPA) might abandon their licensing processes.
According to these organizations, the greatest risk is the increase in illegal platforms, which do not pay taxes and may offer more attractive odds to players.
Source: GMB
