A bill reshaping tax obligations for online betting operators, fintechs, and dividend payments cleared the Brazilian Senate’s Economic Affairs Committee (CAE) this week with a broad majority. The measure passed on Tuesday in a terminative vote—21 to 1 according to Valor International, positioning it to advance to the Chamber of Deputies unless senators request a full floor review. Senator Carlos Portinho has already signaled plans to pursue such a request.

The proposal, authored by Senator Renan Calheiros and reported by Senator Eduardo Braga, brings back parts of a provisional measure on the Financial Transactions Tax (IOF) that expired when the Lower House declined to vote on it. The script of negotiations has been marked by tension between lawmakers and the administration, as the government seeks to preserve recently enacted tax reforms while Congress weighs new exemptions and extended deadlines.

Dividend Exemptions and Disputes Over Changes

A central element of the bill is a revised timeline for dividend taxation. Under the version approved by the CAE, dividends calculated through December 31, 2025, would remain exempt if distributed by April 30, 2026. This adjustment extends the current rules, which allow exemption only if distribution occurs by the end of 2025.

Legal specialists say the extended deadline improves predictability for companies planning distributions. Yet attorneys note that the benefit applies only to Brazilian residents, leaving foreign shareholders without a matching provision. Firms with both domestic and overseas investors may need to adhere to the stricter timeline to avoid regulatory complications. Accounting organizations have also challenged the current taxation rules, arguing that assessing dividends in December does not align with standard financial reporting schedules. One union that has sought a court injunction said the CAE’s action responds to the concerns raised in its lawsuit but emphasized that approval by both houses and the executive branch remains essential.

Planned Increases for Betting and Financial Firms

The bill outlines a graduated rise in the federal levy on Gross Gaming Revenue (GGR). Today’s 12 percent rate would increase to 15 percent in 2026 and 2027, then reach 18 percent in 2028. This path replaces the earlier 24 percent proposal that generated opposition from regulated operators and analysts. Senator Braga told colleagues, “Our concern is that a sudden doubling of the rate would damage companies that chose to enter the legal framework, while irregular operators would continue to act with impunity and pay nothing into the public coffers.” Calheiros supported the revised structure as a measure that boosts social funding without straining the newly regulated market.

Some projections estimate that the stepped increases could add R$5 billion to the economy in 2026, R$6.3 billion in 2027, and R$6.7 billion in 2028. Betting revenue is currently tied to Brazil’s social security budget, with the bill preserving that destination while allowing the federal government to redirect part of the additional revenue to states or municipalities during the transition years.

The legislation also targets illegal betting platforms and fintechs, with provisions aimed at curbing money-laundering schemes linked to organized crime. For financial firms, the proposal raises the CSLL rate for payment institutions from 9 percent to 12 percent in 2026 and 15 percent in 2028. Credit and investment fintechs would see increases from 15 percent to 17.5 percent in 2026 and 20 percent in 2028. Banks would remain at their current 20 percent rate. Additional tax adjustments include raising the rate on interest on equity from 15 percent to 17.5 percent.

Regulatory Developments Underway

Alongside congressional action, Brazil’s Ministry of Finance has opened a public consultation to help shape the 2026–2027 regulatory agenda of the Secretariat of Prizes and Bets (SPA). The consultation, launched on December 1, invites contributions for 45 days and seeks input on which regulatory matters should take priority. SPA secretary Regis Dudena highlighted the importance of predictable planning cycles and broad participation, noting that feedback helps refine oversight goals.

The agenda will cover areas ranging from fixed-odds betting to lotteries and promotional contests, incorporating the sector’s recent expansion since 2023 legislation. Submissions will be accepted until January 14, and the final agenda is expected by late February. This cycle is the first to use the government’s newly consolidated digital participation platform.

As the bill moves to the Chamber of Deputies, both legislative debate and regulatory planning are set to shape Brazil’s betting and financial sectors over the next several years.