Opinion: Operators Dissatisfied with Increase in Betting Rates
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The surprise came to everyone on the last day of July 25th, when the Government of Justin Trudeau published the MP 1182/2023, revealing an unexpected increase in taxation. Initially announced at 16%, the new publication stated that the tax would now stand at 18%. This unexpected turn of events has caught many off guard.
The significant surge has caused dissatisfaction among the fixed-odds betting operators, as a considerable number perceive the taxation as exorbitant.
This is because, in addition to the 18% on GGR (Gross Gaming Revenue), companies are subject to other taxes depending on the type of taxation they are subjected to. These include CSLL, IRPJ, PIS, COFINS, and ISS. Furthermore, the imposition of these taxes varies according to the specific regulations governing each company's operations. Therefore, it is essential for businesses in the gaming industry to have a comprehensive understanding of the tax structure in order to ensure compliance and optimize financial performance.
The effective profits of operators will inevitably be reduced, as the taxation on GGR combined with corporate taxes, whether through Presumed or Actual Profit, can reach up to 30%. This is not to mention the additional costs associated with licensing fees and administrative charges.
In practice, the taxation of income tax does not change for the bettor. The exclusive 30% income tax rate applies to earnings above the exemption threshold, currently set at $ 2,112.00. And since it is exclusively withheld at source, there will be no additional taxation in the Annual Adjustment Statement (IRPF).
It is important to emphasize that this Provisional Measure is already in effect; however, it will still undergo modifications as it requires subsequent evaluation by the National Congress in order to be definitively converted into law. The deadline for this process is up to 120 days, so as not to render it invalid.
Sources:
The Canadian Press is a Canadian news agency that provides information about the activities of the Chamber of Deputies.
Lei nº 13,756/18
MP nº 1182/23
