Sports betting taxation should be voted on in November in the Senate

The text under discussion also determines that there will be a 30% Income Tax (IR) charge on amounts received by bettors that exceed the current exemption range, set at R$ 2,212 (US$ 440). Once the project is approved, the government expects to raise between R$1.6 billion (US$ 320m) and R$5 billion (US$ 1bn) per year. In July, the federal government had already published a provisional measure with the aim of taxing the sector.

Tax collection is part of the government's set of actions and proposals to increase tax collection in 2024. Last Friday (10/27), President Luiz Inácio Lula da Silva stated that the target of zeroing the fiscal deficit will “hardly” be met next year. The statement brought down the Stock Exchange (B3) and raised the price of the dollar.

In the Senate, the proposal needs to be voted on by the Sports Commission (CEsp), which should happen this week. It also has to go through the Economic Affairs Commission (CAE). After that, it will go to the plenary for consideration.

Rapporteur at the Senate's Economic Affairs Committee (CAE) of the Bill that regulates sports betting and legalizes online gambling, senator Angelo Coronel (PSD-BA) is formulating with the Ministry of Finance a solution so that the taxation is calculated monthly taking into account the bettor's capital gain in the period, as happens on the Stock Exchange.

In recent weeks, Coronel spoke about the possibility of setting different rates for the two segments. In the Chamber's version, the charge was 18% for both. In the Senate, the rapporteur is considering maintaining this rate for online gambling platforms, but reducing that for sports betting to 12%. The senator does not rule out setting the rate for both activities at 15%. “The average, whether there is a different rate or not, is 15%,” he argued.

In addition to conversations with the Ministry of Finance and deputies, Coronel has also aligned the main points of the opinion with Senator Romário (PL-RJ), who reports on the proposal in the Senate Sports Committee.

On October 18, the vote on the project was postponed at the Sports Commission, as a result of a collective request for a view. The rapporteur of the proposal at CEsp, senator Romário (PL-RJ), presented a text with changes to the proposal approved by the Chamber. He maintained a charge of up to R$30 million (US$ 6m) as a grant for sites that want to operate in Brazil, but changed the payment term from 3 to 5 years.

Romário also changed the distribution of resources collected from taxation. He included the Ministry of Health and civil society entities in the list of beneficiaries. The senator's division was as follows:

• 2% for Social Security;
   
• 1.82% for the Ministry of Education;
   
• 6.68% for the sports area, with 4% for the Ministry of Sports and 2.23% for sports confederations, with the exception of the CBF (Brazilian Football Confederation), 0.5% for state sports secretariats and DF and 0.05% for the Brazilian Master Sports Committee;
   
• 4.30% for the tourism area, with 3.50% for the Ministry of Tourism and 0.80% for Embratur;
   
• 0.5% for the Ministry of Health, for measures to prevent, control and mitigate social harm arising from gaming in healthcare areas;
   
• 0.15% divided between civil society entities, with 0.05% for Fenapaes (National Federation of Associations of Parents and Friends of the Exceptional), 0.05% for Fenapestalozzi (National Federation of Pestalozzi Associations) and 0. 05% to the Brazilian Red Cross;
   
• 2.55% for the FNSP (National Public Security Fund).

The original project prepared by the government did not include the transfer of resources to the Ministry of Tourism and allocated 3% of the revenue (as opposed to the current 4%) to the Ministry of Sports. Both portfolios are occupied by Centrão. These changes were made during the proposal's processing in the Chamber.

Source: Metropolises