BRASILIA (Reuters) -Brazil’s government said it would start discussing on Wednesday measures to offset Congress’s shelving of a proposal that would have overhauled taxation on investments while also raising taxes on betting and fintech companies.
Speaking at the Senate’s Economic Affairs Committee, Finance Minister Fernando Haddad said on Tuesday that lawmakers had expressed interest in finding ways to correct and replace the dropped proposal. Betting firms must contribute to addressing the side effects of a form of entertainment that can lead to addiction, he said.
Discussions had been on hold pending President Luiz Inacio Lula da Silva’s return from a trip to Italy on Tuesday.
Senator Humberto Costa, a member of Lula’s Workers Party, said it was “extremely important” for the government to decide whether to send Congress a new proposal to tax betting firms.
“I think we can make it move forward. We shouldn’t consider the issue of betting taxation as settled,” he said.
The government had expected a fiscal gain of 14.8 billion reais ($2.69 billion) this year and 36.2 billion reais in 2026 from changes sent to Congress via an executive order that needed approval by last Wednesday to remain in force.
Of that total, only 284.9 million reais this year and 1.7 billion reais next year would have come from raising the gross gaming revenue (GGR) tax on online betting companies to 18% from 12%.
Amid last week’s negotiations, the government agreed to erase that provision, and the version that reached the Lower House no longer included the higher rate.
Most of the expected fiscal gain from the shelved proposal would have come from tighter rules on companies’ use of tax credits, projected to raise an additional 10 billion reais this year and the same in 2026.
($1 = 5.5014 reais)
(Reporting by Marcela AyresEditing by Frances Kerry)
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