The Brazilian Institute of Responsible Gaming (IBJR) has raised significant concerns over the proposal from the National Confederation of Industry (CNI) to create the “CIDE-Bets,” with a rate of 15% on each bet.
According to the IBJR, which brings together the main sports betting companies in Brazil and around the world, the tax would directly benefit the underground market.
The market already faces “one of the highest tax burdens in the world for this sector: there is a 12% tax on GGR, plus PIS/Cofins and ISS, which brings the total tax burden on consumption to approximately 25%. There is no ‘tax benefit,’ but rather an emerging industry trying to survive the unfair competition from those who do not pay taxes.”
In a statement the IBJR argues that the CNI proposal is also based on a serious economic error as the estimated revenue of R$ 8.5 billion by 2026 is highly overstated. To emphasis its point further the IBJR also published a study on the negative impact of the CNI proposal.
“Underground platforms do not pay taxes, and they will not start paying them with the CIDE-Bets. The effect would be the opposite: a reduction in the tax base and an accelerated migration to the illegal market. According to a study by LCA Consulting, reducing the underground market by just five percentage points could generate around R$ 1 billion more per year for public coffers.”
“In practice, a tax of 15% on each bet amounts to giving a reversed bonus of 15% to the illegal market, an incentive created by the state itself, which would artificially increase the attractiveness of irregular platforms. It would be a reward for those who do not pay taxes and a punishment for those who comply with the law. The inflated projection of the CIDE-Bets is not supported by any realistic consumer behaviour model. By making the regulated market more expensive, revenue decreases and crime increases,” André Gelfi, director-counsellor and one of the founders of the IBJR said.
A manifesto from the National Industry Forum (FNI), an advisory body of the National Confederation of Industry (CNI) has suggested the creation of a selective tax on betting. The document titled “For the Taxation of Bets” proposes applying a 15% tax on the amount wagered at the time of online betting, similar to the taxation on cigarettes and alcoholic beverages. The intention is for the funds raised to finance initiatives in health and education.
The post New tax proposal in Brazil will drive players to underground market says IBJR appeared first on G3 Newswire.
The Brazilian Institute of Responsible Gaming (IBJR) has raised significant concerns over the proposal from the National Confederation of Industry (CNI) to create the “CIDE-Bets,” with a rate of 15% on each bet. According to the IBJR, which brings together the main sports betting companies in Brazil and around the world, the tax would directly benefit…
The post New tax proposal in Brazil will drive players to underground market says IBJR appeared first on G3 Newswire.