Brazil gaming tax increases could push rates to 50%, threatening legal operators and boosting illegal betting markets. Industry warns of dire consequences.
Current Tax Structure Creates Heavy Burden
Licensed operators in Brazil currently face one of the world’s most complex tax structures. The existing framework includes a 12% gaming tax on gross revenue, combined with 9.25% from PIS and COFINS federal social contribution taxes. Municipal taxes can add another 5%, creating a total gross revenue tax of up to 26%.
Beyond revenue taxes, operators must pay substantial profit taxes. Corporate income tax reaches 25%, while social contribution on net profit adds 9%, pushing the effective profit tax rate to 34%. Monthly inspection fees can reach approximately R$2 million per company, adding significant operational costs.
Industry experts note that this Brazil gaming tax burden already places operators among the most heavily taxed globally. The Brazilian Institute of Responsible Gaming represents major industry voices calling for reform.
Market Stability and Investor Confidence at Risk
The associations emphasize that sudden tax increases could invalidate substantial investments made under current regulations. Licensed operators have committed significant resources based on existing legal frameworks. Abrupt changes risk destabilizing the entire regulated market and potentially triggering legal challenges.
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