The text explicitly excludes slot machines and the like from the definition of "electronic game". Fantasy games, also known as eSports, are defined as those played in a virtual environment based on the performance of athletes in real sporting events.
Already approved by the Chamber of Deputies, the project received a favorable opinion from Senator Irajá at the Economic Affairs Committee (CAE).
According to the Brazilian Association of Fantasy Sport (ABFS) the legal framework for games has the potential to increase the annual revenue of companies in the sector by up to 120% - from R$ 12 billion (US$ 2.45bn) per year to R$ 30 billion (US$ 6.1bn) per year.
However, the ABFS believes that the tax reform pending in Congress may increase the sector's costs and discourage investments, as these startups would have to bear higher costs.
"By the reform proposal currently being analyzed by the Senate, the maximum rate of the Value Added Tax, the IVA, would be 25%. With the exceptions to several sectors included in the Chamber, the expectation, according to IPEA, is that this rate will reach to 28%. As the ISS charged by the Municipalities has rates that vary from 2% to 5%, and the PIS and COFINS have rates that, together, make up 9.25%, their sum ranges from 11.25% to 14% .25% of revenue," estimated the ABFS.
"In practice, it means that, at the maximum rate margin, the sector's tax burden would practically double, impacting the generation of new jobs and the capacity for new investments in a promising market, which can grow by up to 120% over the next three years," it completed.
Source: GMB
