Bookmakers Propose Retroactive Tax in Exchange for Lower Taxation

Pressure on bookmakers

The Brazilian government, under the leadership of the Minister of Finance, Fernando Haddadis looking for ways to increase tax revenue without the need for spending cuts, especially in a pre-election year. One of the main targets of this strategy are betting houses, which have been operating in Brazil, often through companies based in tax havens. The proposal is for these companies to pay retroactive taxes for the last five years.

The idea of charging retroactive taxes to these bookmakers was discussed in Congress as part of a compensation package for increases in government spending. Since the beginning of the year, the Ministry of Finance has defended this measure, arguing that bets that operated in Brazil before the regulation should already be subject to national tax.

The defense of the Federal Revenue

In March, Robinson Barreirinhas, secretary of the Federal Revenue, stated that betting houses that operated and generated income in Brazil owe taxes to the country. According to him, if these companies were in fact operating in Brazil, they have an obligation to pay taxes retroactively. This position was clear and objective, but ended up not being included in the new bill proposed by Calheiros.

The retroactive charging proposal, although controversial, has significant revenue potential. It is estimated that this measure could generate R$12.5 billion at once, which would be an immediate relief for the government budget.

The bookmaker’s strategy

Faced with this scenario, many bookmakers are mobilizing to resume the discussion on retroactive tax collection. They are proposing this charge as a bargaining chip to achieve a reduction in the future betting rate, which could be limited to up to 15%.

A businessman in the sector, who preferred to remain anonymous, highlighted that, although the retroactive charge may penalize large bets that have been operating in Brazil for a longer time, paying this tax is seen as a necessary evil. For long-term investments, the idea is that a single payment, referring to the past, is more advantageous than a continuous and indefinite fee in the future.

The silence of the Ministry of Finance

Despite the movements of bookmakers, the Ministry of Finance has not yet officially taken a position on the proposed chargeback in exchange for lower taxation. The report attempted to contact the ministry to obtain a position, but at the time of publication, there was no response.

The absence of an official response leaves the sector in a state of uncertainty, but also opens up space for negotiations and adjustments that could benefit both the government and the companies involved.

Because, in the past, if they had income here in Brazil, had revenue, and were in fact in Brazil, they owed taxes to Brazil.