igamingnext photo
Brazil’s National Congress has overturned President Lula’s veto on an income tax exemption to the 15% tax on winnings in the country’s gambling legislation.

Following the veto, a bettor’s winnings tax will depend on which tax band they fall into, as opposed to being applied to all players without discrimination.

Players than earn too little to pay income tax, that is below R$24,511.92 (€442) per year, will not be required to pay the winnings tax.

The veto represents a small victory for industry, which has criticised the winnings tax as an effective boon to the unlicensed segment.

The Ministry of Finance had recommended Lula veto the exception, arguing it was unconstitutional and contrary to public interest.

It said this is because the measure would go against the Federal Constitution’s requirement of tax equality under the law.

At present, the winnings tax applies to withdrawals above R$2,824 per month and is set at 15% of the total.

The news follows yesterday’s publication of a government ordinance that confirmed the 15% tax rate on winnings.

Normative Ordinance No. 2,191 details the tax’s framework, which will involve betting operators both calculating and collecting the amount.

Brazil creates framework for gambling market

Brazil is currently in the process of regulating its sports betting and iGaming industry after the president signed Law 14,785/23 in 30 December 2023.

The Ministry of Finance’s Prizes and Bets Secretariat (SPA) is overseeing the publication of the technical regulations that will set out the structure of the soon-to-be legal market.

This will involve a four-step phased process, with the government body issuing monthly sets of ordinances that detail the market’s rules.

These include regulations surrounding accreditation, technical competence, anti-money laundering, responsible gambling and licensing procedures.

The final set of ordinances are due to be published in July, with the government having said it plans for the market to launch in 2024.

Similar posts