The Brazil Senate Economic Affairs Committee (CAE) has approved a gradual tax rise on gambling, which will see the rate eventually reach 18%.
On Tuesday, the CAE approved PL 5,473.2025, which will see the tax rate on gambling operators rise from the current level of 12% to 15% in 2026 and 2027, before reaching 18% in 2028.
The bill was approved on a vote of 23 to one.
The additional revenue will go towards social security, with priority given to the health sector.
However, between 2026 and 2028, the federal government could decide to transfer the additional resources to states, the federal district or municipalities.
Initially, the bill proposed to tax gambling operators at a rate of 24%. Senator Eduardo Braga said such a rate would risk a rise in popularity of the illegal market.
“Our concern is that the intended increase, which abruptly doubles the current percentage, will harm already legalised companies, while irregular ones will continue to operate with impunity and without paying a single cent to the public coffers,” Braga said.
After the bill was approved by the CAE, it will now go to the Chamber of Deputies for final approval.
If published, the new tax rates would come into effect from the first day of the fourth month following publication.
Brazil government determined to hike gambling tax
With a general election approaching next year, President Lula’s government appears determined to raise gambling taxes to help meet its fiscal targets.
The administration recently suffered a major setback when its provisional measure to increase the gambling tax by 50% was rejected.
According to Brazilian iGaming analyst Elvis Lourenço, this defeat has prompted the government to make renewed, and increasingly desperate, attempts to push the tax rate higher.
“That’s the main reason that they struck back so fast, because it was embarrassing for them,” Lourenço, managing partner of EX7 Partners, said to iGB in October.
“This becomes an election agenda, because this is good for the audience and the public to get votes because we are a conservative country in some ways. So, to put this on their agenda, ‘we increase the taxes of the billionaires, of the gambling world’, it is good for the speech of the actual government.”
Licensed operators could be set to pay a tax of 18% of GGR, in addition to a host of other taxes.