Brazilian government ensuring domestic tax payment for overseas gaming firms

The South American nation of Brazil is making steady progress toward the introduction of new gaming and sports betting options. According to reports, the federal government is now working on developing strategies to ensure that international companies pay domestic taxes while the industry is being established.

Reports indicate that government officials are in favor of a legislation that would require every foreign operator to establish a localized office in Brazil. Following these steps will ensure that a greater amount of tax revenue is collected and that the government will get payments.

Ensure the Collection of Domestic Taxes

In February of this past year, the Chamber of Deputies voted to pass Bill 442/91, which would impose a tax rate of 17% on all forms of gaming. The fact that license holders would be free from paying domestic taxes within municipal services, employer taxes, federal social assistance, fixed income tax, and social/civic fund taxes was one of the unintended consequences of the proposed legislation.

According to a claim by a local media collective known as R7, if the government continues to pressure overseas gaming firms to establish a presence in Brazil, then all applicable taxes will be paid in full. Because the corporations in question would have their headquarters in the nation, the exemptions from the bill would be rendered null and void.

This concept is not ground-breaking in any way, as previous suggestions have already called for the requirement of a Brazilian company address. Another concept being discussed is the possibility that there should be a minimum number of people living in a nation before a corporation may begin providing its services there.

Evangelical Response

As the push for legalized gambling in Brazil continues to gain traction, government authorities are holding meetings with members of the Evangelical community to hear their perspective on the matter. Recently, President Jair Bolsonaro discussed the plan in a meeting with Minister Ciro Nogueira of the Executive Office of the President of Brazil.

Evangelical public figures are generally opposed to gambling; yet, these representatives have indicated that it would be impossible to eliminate betting sites for sports within the nation. The organization believes that because the activity is already going place and cannot be stopped, it would be more beneficial to legalize it and tax it rather than try to stop it.

It is anticipated that Congress will consider adding more forms of gambling, such as bingo and quick gaming, to the proposal. On the other hand, it's possible that individuals who oppose this change, such evangelicals, won't take well to this new strategy. The religious authorities are concerned that any modifications to the legislation might result in an increase in the number of people playing and cause the gambling industry to take over the country and provide a variety of services.

After the elections in October are done, the relevant government authorities will keep working on the law until they have finalized all of the necessary revisions and will then put it to a vote.