🙈Brazil🇧🇷: new reform could raise gambling tax to 42%

🙈Brazil🇧🇷: new reform could raise gambling tax to 42%

The proposal is not an isolated measure but part of a comprehensive restructuring of Brazil’s tax system, with direct implications for the gambling and betting industry. The ongoing reform of the tax framework could push the overall tax burden on betting activities to as high as 42%, depending on how the new rules are implemented and combined.

Currently, licensed betting operators pay approximately 27% in federal taxes, while the information technology sector faces an average tax burden of around 15%. In addition, by 2028, the tax on GGR (Gross Gaming Revenue) is expected to reach 15%, as the scheduled gradual increase in the applicable rate has already taken effect.

➡️ Explanation: Brazil does not operate a traditional value-added tax system but instead applies a structure of indirect taxes.

➡️ PIS (Social Integration Program tax) applies to the revenue of companies providing services, acting as commercial intermediaries, or importing goods and services. This applies to both domestic and foreign companies operating in Brazil.

➡️ COFINS is a federal tax constitutionally levied on the gross revenue of legal entities. For domestic goods or services, the rate ranges from 3% to 7.6%, depending on the tax regime. For imported goods, the rate is 9.65%, and for imported services, 7.6%.

➡️ Planned reform: beginning in 2027, PIS and COFINS will be replaced by CBS, a contribution on goods and services. In 2026, a pilot rate of 0.9% will be introduced. This rate will increase gradually until reaching 28% in 2033.

➡️ The informal market currently accounts for an estimated 10.7 billion reais (2 853 690 000 USD) within the Brazilian economy. Under these conditions, there is a risk of increased migration of companies and users to the unregulated sector.

#news #Brazil #gambling #betting

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