20 Jun, 2025
While the proposal has not yet been approved, it is already facing strong opposition from the country’s regulated betting industry.
The proposed increase was included in a Provisional Measure (MP) and accompanying decree that finance minister Fernando Haddad (pictured) presented to President Luiz Inácio Lula da Silva yesterday (10 June).
According to multiple media reports, the full fiscal package could be published in the Official Gazette of the Union (DOU) as early as today (11 June), but final approval will require congressional backing.
The tax package follows the government’s recent decision to withdraw a controversial decree that sought to raise Brazil’s financial transactions tax (IOF) from 0.38% to 3.5%.
That proposal was met with strong resistance from lawmakers and financial market participants, and was ultimately scrapped.
In its place, the government is proposing a series of new tax measures, including the betting tax increase and a 5% levy on previously exempt financial instruments such as Real Estate Credit Bills (LCIs) and Agribusiness Credit Bills (LCAs).
Haddad said the administration hopes to take advantage of a “climate of dialogue” in Congress to expedite debate and pass the new package, which is seen as key to closing the country’s budget deficit in 2025.
The Brazilian Institute of Responsible Gaming (IBJR), which represents major licensed operators in Brazil’s newly regulated gambling market, has repeatedly criticised the proposed tax hike.
In a statement released Monday (9 June), the IBJR called the measure “unacceptable,” warning that it could threaten the sustainability of the legal market and erode investor confidence in Brazil’s regulatory framework.
The institute said the proposal “makes it impossible for many companies that trusted and invested in the regulated market to operate, generates legal uncertainty and threatens public revenue.”
The IBJR also warned that a higher tax burden could push consumers back to the illegal market, which it said already accounts for an estimated 50% of all gambling activity in Brazil.
“By raising the tax on bets, the illegal market tends to grow from the current 50% to at least 60%, generating an estimated loss of more than R$2bn per year in revenue,” the group stated.
The IBJR added that operators entering the regulated market were required to pay R$30m for a five-year licence, generating over R$2.3bn in public revenue to date.
Many of these companies based their long-term plans on Brazil’s original 12% GGR tax rate.
According to the IBJR, the proposed increase “compromises the economic and financial balance and the confidence in the regulatory environment.”
The group added that companies are considering legal action and are calling for renewed dialogue with both the government and Congress.
