Reports from key Brazilian media outlets O Globo and Folha de S.Paulo will have grabbed the attention of the iGaming world at the end of last week, as debate around taxes elevated once again.
Details suggested that an economic team put together by the Government has “held discussions to raise the Gross Gaming Revenue (GGR) tax on betting operators from 12% to 18%”.
The news would be a blow to operators looking to gain significant market share in Brazil, as volatility around the Latin American country continues.
Whilst the rise would leave the country near the top of international markets when it comes to GGR tax for iGaming, diluting its allure amongst the full spectrum of global players.
Previously, there were discussions around the raising of the Financial Transactions Tax (IOF) from 0.38% to 3.5%. These plans were paused, however, as the framework in the country continues to take shape.
Plans to increase the tax were halted concerns around investor confidence in the overall gambling sector, amidst fears from the central bank.
At a key time for the market and for ensuring maximum investor engagement and attractability, the move was described as ill-timed and inflationary.
The Minister of Finance (MEF) is seemingly viewing the gambling sector as the Government in Brazil looks to plug gaps within its economy.
Recent estimates cited in BNLData, the Brazilian betting market is generating around R$2.8bn (€440.5m) in monthly turnover, with federal receipts via DARF Form 5862 (the payment channel for fixed-odds betting tax) already contributing approximately R$755m in the three months between February and April.
Calls have intensified for ministers to take into account the already substantial tax burden facing licensed operators under the Bets regime.
The current framework includes a 12% gaming tax, 9.25% in PIS/COFINS, up to 5% ISS (municipal services tax), and 34% in corporate profit tax. Adding a potential Selective Tax (a form of “sin tax” under discussion) could push effective tax rates close to 50% — a threshold that many fear would deter investment and undermine market sustainability.
A study by H2 Gambling Capital indicates that as of 2024, 86% of Brazilian GGR was captured by regulated operators, with 70% of market share belonging to holders of provisional licences, and 17% to permanent ones. Unregulated activity had dropped to 14%, reflecting broader success in legal market channelisation.
