Brazil Betting Industry Warns Against Tax Increases Amid IOF Overhaul

Brazil's betting industry is strongly opposing proposed tax increases that aim to offset potential revenue losses from a possible rollback of the IOF tax hike on financial transactions. Licensed operators already face one of the world's highest tax burdens, including gaming taxes, corporate profit taxes, and regulatory fees, with total taxes potentially approaching 50% due to recently approved selective taxes and upcoming tax reforms. Industry leaders warn that increasing taxes further could undermine the legal market's viability and encourage illegal gambling activities. Meanwhile, the hospitality sector suggests targeting untaxed areas like virtual betting platforms and cryptocurrencies to broaden fiscal revenues instead of burdening existing sectors. Finance Minister Fernando Haddad indicated that any IOF tax adjustments would be part of broader financial tax reforms aimed at correcting systemic imbalances rather than isolated changes. Data shows taxing betting sites heavily enough to offset IOF revenue losses would require confiscating an unsustainable share of their revenue, highlighting the fiscal challenge Brazil faces in balancing public accounts without stifling regulated industries.