The country of Brazil is steadily working towards launching new gambling and sports betting services. As the industry is being set up, the federal government is reportedly working on ways to ensure that foreign businesses pay domestic taxes.
According to reports, government officials are backing a measure that will force any foreign operator to create a localized office in Brazil. This step will ensure that a higher tax income is made and payments will be received by the government.
Ensuring Domestic Taxes
Last February, the Chamber of Deputies approved Bill 442/91 to set a 17% tax rate for all gambling categories. One downside to the bill was that license holders would be exempt from paying domestic taxes within municipal services, employer taxes, federal social assistance, fixed income tax, and social/civic fund taxes.
A local media group known as R7 reported that with the government forcing the foreign gambling operators to create a business in Brazil, then all taxes would be paid. The exemptions from the bill would not be valid because the companies would be based in the country.
This idea is nothing new as other proposals have included the need for a business address in Brazil. Another idea is also being thrown around, that businesses may need to have a certain number of inhabitants in the country to offer services.
As the movement for licensed gambling moves forward in Brazil, officials are meeting with Evangelical representatives to get their take on the process. President Jair Bolsonaro recently met with Ciro Nogueira, the Minister of the Executive Office of the President of Brazil, to discuss the proposal.
Public officials in the Evangelical sector are opposed to gambling in general, however, the representatives have stated that it would be difficult to remove sports betting sites in the country. The group has stated that since the activity is taking place and cannot be prevented, it is better to legalize it and tax the activity.
It is expected that Congress may add more types of gambling to the measure like bingo and instant games. However, this move might not go over well with those who are opposed, including the Evangelicals. The religious leaders do worry that any changes to the legislation, it would lead to more gambling growth and overtake the country with multiple services.
Government officials will continue to work on the final amendments of the bill and will send it for a vote once the October elections are completed.