“You have to be careful not to make a mistake; that is our concern,” said Appy in an interview with Estadão/Broadcast. “It’s not that we’re against ‘bets’ in the Selective Tax, it’s not that we’re against taxation; but it is necessary to be careful when charging this tax so that the final effect is not the opposite of what is imagined – instead of legalizing and taxing the sector, it induces a migration towards illegality.”
‘Bets’ on the ‘Sin Tax’
Deputies from the working group that prepared the tax reform regulation report, approved in the Chamber last week, included ‘bets’ – as operators are called in Brazil - in the Selective Tax with the argument that gambling addiction is a public health issue.
Afterwards, they claimed that the revenue could help to offset the effect of the entry of meat from the basic food basket with exempt taxation – which will have the effect of putting upward pressure on the reference rate of the new Value Added Tax (VAT), formed by the CBS ( Contribution on Goods and Services, from the federal government) and by IBS (Tax on Goods and Services), from States and municipalities.
In an exclusive interview with Estadão/Broadcast, the secretary said that electronic games are a new activity that will be taxed at the full rate of the new VAT – levied on the difference in the value of bets and the prizes paid to bettors. In addition, there will be a 12% contribution charged on the same basis, according to the proposed regulation of sports betting, approved by Congress in December last year.
Appy considers that the deputies made more changes to the text that increase the average VAT rate of 26.5%, according to the estimate of the proposal sent by the Treasury, than changes that reduce it.
During discussions on the reform regulation in recent weeks, parliamentarians even considered a scenario in which the inclusion of new items in the Selective Tax could offset new benefits, such as the exemption on meat.
“There were more factors that increased the rate than reduced it, but there were some factors that contributed to reducing the rate,” said the secretary. “I don’t have a deadline yet for the new calculations, although the team is working. But there has been a lot of change and this influences the new calculation,” he concluded.
Source: Estadão
