Michael Pollock said that Brazil should define the tax issue clearly, without forgetting that it is a global activity and will be a privilege to be granted to those who submit to regulatory requirements. "You can not forget that it will be a process of competitiveness and each one should offer the best to get their license," he commented, making it clear that it will be very important to establish the tax burden even before those interested in the licenses submit their proposals.
Senator Coley has reinforced what he said yesterday during the first day of the congress that illegal gambling currently moves R$60 billion (US$14.3bn) in the country. "If it reaches this value, means that gaming is already established in Brazil, only needing to be regulated. It will only be necessary to put the activity into law and apply the resources generated in health, education or where it is defined by law. As a legislator, I say with great certainty that Brazil must do something about this," said Coley.
According to him, with this sum of resources, the country has much to gain from regulation, "as we were a decade ago." He cited the example of Ohio, where there are 11 casinos for a population of just over 10 million people. "It does not compare like a city of the size of São Paulo, that has more inhabitants than our state, that is, the businesses will be very successful, since it is thought the tax load to be applied to the casinos. It has no sense thinking that raising the tax will keep the attraction of big investors. They will only come to Brazil if the taxation is compatible with international standards," he said.
Turned to Francisco Caamaño, from Sortis, he commented on the evolution of rates applied in Panama in the last 17 years, where some activities had a certain increase in taxation. "Today, we have a new flat rate of 5.5% charged directly to the player in the purchase of chips. The industry contributed, in 2014, with a total of US$340 million, but all games had a reduction of revenue from the creation of the fixed rate of 5.5%, ie simply wanting to increase taxation is not an action that brings benefits to the sector and, of course, to society, since there was a decline in taxes, investments and jobs, as well as suspension of opening of new houses. Of the 14 casinos studied, seven had EBDT and some are for sale," he said. According to the executive, the increase in taxation has compromised the development of the activity and therefore "recommend adequate taxes instead of appetite for tax revenue," he said.
The consultant Federico Lannes commented that the tax issue directly affects the taxpayer and "puts down the competitiveness of companies in all segments and this is no different in the gaming industry," he said.
Lannes cited the example of Argentina, where 240,000 work in casinos, bingos and lotteries, which is a workforce that needs to be respected in an environment with 70,000 gaming machines. From this perspective, Lannes estimates that for Brazil, it would be feasible, considering the Argentine example, more than 350 thousand machines.
"With this, the tax revenue would be huge, even if it was a low tax. In Argentina, there was an increase in gambling taxes, compromising part of the revenue of the operators, which did not pass the increase to the players, as it was in Panama, where the tax was applied directly to the customer and not to the operator," he said. "When dealing with the tax burden, one must analyze its impact on the operation," Lannes said.
“It is very clear that the lower the tax, the greater the expenses, seeing a table of taxation of games in the United States, where Nevada rises as the highest tax revenue in proportion to the amounts spent, which makes it clear that, because Las Vegas has the lowest tax rates, is where the expenses are higher,"he said. For Lannes, "Brazil should avoid the mistakes that were made elsewhere, such as in Panama or even in Argentina, where there was also an increase in taxes," he added.
José Luiz Brazuna, of the Municipal Tax Council, said that Brazil's problem is the high tax burden on goods and services. "We have a multitude of taxes on the sale of products and services, which makes our tax system very complicated. The competitiveness index places us far behind developed countries because of the high tax burden. We have a large but highly taxed market, which becomes a barrier to investment," he said, stating that the regulation of the gaming industry should bear in mind international examples and how much activity could be taxed without deterring potential investors, showing in followed by the heavy burden of taxes in Brazil.
"The country's great challenge in regulating the activity is to identify where the activity should be developed, in the private sector or in the public sector. Because it is not a public service, it must be in the hands of the private sector, and it is up to the State to grant or license and define a realistic and non-abusive tax environment," he concluded.
Source: Exclusive GMB
