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Brazil’s federal government is preparing to impose a Selective Tax on online betting, scheduled to take effect in 2027, but it has not set a date for sending the proposal to the National Congress.
According to O Globo, the government has already internally determined a tax rate for online betting. However, the rate remains confidential and could be changed before the bill is formally submitted.
The government’s approach is based on more than revenue considerations. Officials believe online betting should receive treatment similar to cigarettes because of concerns over gambling addiction.
The proposed rate is expected to be calibrated so that it is significant without becoming high enough to encourage platforms to move into illegal operations, a problem authorities have seen with unbalanced taxation of cigarettes and alcohol.
Political considerations are contributing to the delay. The government is concerned that debate over tax rates ahead of the elections could generate criticism at a time when it is already under pressure over policies aimed at increasing revenue.
The timing is also linked to decisions over the implementation of the Tax Reform. The government is considering whether expected revenue from the Selective Tax and CBS, the Contribution on Goods and Services that will replace PIS and Cofins, should be included in the 2027 budget bill. The current expectation is that the estimates will be included, although political and technical discussions are continuing.
Under the legislation, the government has until September 15 to formally submit the CBS tax rate to the Federal Court of Accounts, or TCU, for validation. There is no penalty for missing the deadline. If the submission is delayed until after the elections, it is expected to take place only in November.
In the most favorable scenario, with approval completed by the end of the year, effective taxation would begin in the second quarter of 2027. The Selective Tax is subject to a 90-day waiting period between publication of the law and the start of collection.