Brazil to increase tax on online betting to 18%

According to O'Globo, following a Sunday evening meeting with congressional leaders, Brazil’s Finance Minister Fernando Haddad announced a series of measures intended to replace a planned increase in the Tax on Financial Operations (IOF). Among the key initiatives is a higher tax rate for companies operating in the online betting sector, commonly known as "bets," along with new income tax charges on previously exempt financial instruments.

Haddad stated that the government will recalibrate the tax rates originally announced on May 22. To compensate for potential revenue losses, a Provisional Measure (MP) will be issued, setting an 18% tax on the gross revenue of online betting platforms—up from the current 12%. Additionally, the government plans to remove tax exemptions from certain financial securities.

The finance minister also noted that the Ministry of Finance will present, on Monday, an official estimate of the size of Brazil’s online betting market to support the proposed tax hike.

Before implementing the measures, Haddad intends to present them to President Luiz Inácio Lula da Silva, who is expected to return to Brazil on Monday night after a trip to France.