The concern of Fernando Haddad's technical team is about what will be included in the text because online gaming accounts for 60% of the revenue of companies in the sector. Online gaming was included by the Chamber of Deputies in the report of Deputy Adolfo Viana (PSDB-BA), approved by other deputies in September. This loophole was not initially foreseen in the Executive's text.
If online gaming is included in the legislation, the revenue will be higher, and the department could negotiate the rate, even presenting an intermediate number (between 18% and 12%).
If the rate is changed, the distribution of the collected resources will also need to be altered. The text already approved by the Chamber allocates the 18% percentage as follows:
The deputies included the Ministry of Tourism and increased the percentage allocated to Sports. Both portfolios are currently held by licensed deputies appointed by the Centrão — Celso Sabino (União Brasil) and André Fufuca (PP), respectively.
The regulation of the sports betting sector was initially planned in a provisional measure (PM). However, as the Chamber and Senate are diverging on the procedure for handling PMs, causing delays in the analysis of such matters, the government had to replace the PM with a Bill. The project was approved in the Chamber of Deputies, where it began its course on September 13.
In the Senate, before going to the plenary, the texts will be evaluated in two committees: Sports, with Senator Romário (PL-RJ) as the rapporteur; and Economic Affairs, under the responsibility of Senator Angelo Coronel (PSD-BA). The vote on both reports is scheduled for next Tuesday, November 7.
Romário has already presented his report, while Coronel is still working on a text. The possibility of a joint report has been raised, but there is still uncertainty about it.
In the Senate, the discussion on reducing the tax rate seeks to build a consensus between the federal government, which is looking for ways to increase revenue, and the companies in the industry.
As the final rapporteur of the Bill that regulates sports betting, Senator Jorge Kajuru (PSD-GO) has defined the contentious points of his final text with the other rapporteurs of the measure. “The three of us agree to oppose a point defended by the federal government. The Finance Minister's project proposed that the tax be charged to the bettor. We changed that. The bettor will only pay tax if they win, and the payment will be proportional to the profit they make,” Kajuru told O Globo.
Grant
The value of the grant (authorization fee) to be paid by websites wishing to operate in Brazil is also under discussion in the Senate. The Chamber's text provides that the grant can be up to R$ 30 million (US$ 6m). As the rapporteur in the Sports Committee, Romário proposes extending the payment period from 3 to 5 years. For the Treasury, extending the deadline can be beneficial by providing more predictability to companies and expanding the pool of interested parties.
"Minister Fernando Haddad also agreed that the license fee should be proportional to the size of the betting house. In other words, not all houses and websites will be charged R$ 30 million. Smaller ones will have reduced taxes. The values will be based on the five-year license period," said Kajuru.
Revenue measures
The collection of tax in this sector is part of the set of actions and proposals of the government to increase revenue in 2024. In the budget proposal sent to Congress in August, the government estimated that this measure could yield R$ 728 million (US$ 147m) in the next year, but Haddad has already mentioned the possibility of it being R$ 2 billion (US$ 403m).
The Treasury is working with the approval of the project by the end of 2023 to have this revenue available in January 2024. At the end of October, President Luiz Inácio Lula da Silva (PT) contradicted the target set by the economic team and stated that it is "hardly" likely that the fiscal deficit will be eliminated next year. This statement led to a drop in the stock market (B3) and an increase in the value of the dollar.
Despite a general interest among lawmakers in approving the project, there is still one national holiday (November 15, Republic Day) and two regional holidays (November 20, Black Consciousness Day in states like São Paulo, Rio, and Bahia, and November 30, Evangelical Day in the Federal District), which could delay the voting schedule.
If the project is indeed amended in the Senate, it will need to return for consideration in the Chamber, where it began its course.
Source: GMB
