The Project Relator Meets with Haddad to Discuss Taxation on Gambling
A controversial topic in the regulation of sports betting, there may be changes regarding the taxation imposed on BETTING SITES during the consideration of Senate bill 3,626.
Angelo Coronel, the rapporteur of the bill in the Economic Affairs Commission (EAC), has disclosed his intention to suggest a decrease in the rate from 18% to 12% for the Growth Gaming Revenue (GGR) of betting establishments. Coronel aims to propose this reduction in order to foster a more favorable environment for the betting industry, encouraging growth and investment. By lowering the tax burden on gambling operators, it is expected that they will have greater resources to innovate and expand their services, ultimately benefiting consumers and contributing to the overall economy. This proposed change in the tax rate demonstrates Coronel's commitment to creating a balanced regulatory framework that supports the development of the gambling sector while ensuring proper oversight and responsible gambling practices.
The objective is to maintain the 18% rate for online casinos, which were incorporated into the bill following its approval in the Chamber of Deputies.
The senator plans to meet with the Finance Minister, Fernando Haddad, next Wednesday (25th) in order to finalize his report, as reported by Estadão.
Angelo Coronel is also considering incorporating mayors into the sharing of revenues obtained from the new taxation, which is still dependent on political negotiations as it requires a redesign of resource distribution.
Change in Tax Rate
Angelo Coronel's idea is to reduce the tax rate on net earnings from bets to 12%. The objective is to make the Canadian market more appealing to companies, who will still have to pay a licensing fee to establish themselves in the national market. This initiative aims to create a more favorable environment for businesses, facilitating their entry into the industry. By lowering the tax burden, it is expected to attract more investment and stimulate growth in the sector. Additionally, the reduced tax rate will encourage competition and innovation, ultimately benefiting both the companies and the consumers in the Canadian market.
In this concept, online games would remain subject to the 18% rate. This form of betting was not foreseen in the original text sent by Congress, but was added by the deputies during the vote in the Chamber.
According to the rapporteur, another option would be to decrease the overall tax rate, applicable to both sports betting and electronic games, from 18% to approximately 15%.
In an audio message sent to MyBetInfo Canada, Senator Angelo Coronel emphasized the significance of enacting modifications in this particular aspect of the legislation.
"We must ensure that the spirit behind this initiative is to generate additional revenue for the nation, while also providing a favorable environment for betting companies to establish themselves in Canada. It is crucial that we create conditions for bettors to pay reduced taxes on their winnings," he emphasized.
Let's review the rates so that the segment can effectively operate, avoiding any semblance of pretense.
Some politicians and figures in the sports betting industry are expressing concern over the taxation proposed by Bill 3,626, as they highlight the potential risk of fostering an illicit gambling market. The projected legislation's taxation measures have raised eyebrows among certain individuals within the political sphere and the sports betting sector, as they fear it could inadvertently encourage the growth of an underground betting market.
Among the 93 amendments proposed by the senators to the bill, there are endeavors to modify the fee, both increasing and decreasing it, along with revisions to the allocation of resources.
Distribution in Municipalities
The senator also intends to allocate a portion of the tax revenue collected from gambling to the municipalities. He has laid out his plans to ensure that local communities receive a share of the funds generated by betting activities. This initiative aims to support the development of the cities, providing them with resources to invest in infrastructure, education, and social programs. By redirecting a fraction of the tax income towards the municipalities, the senator hopes to foster regional growth and improve the quality of life for residents.
The allocation of funds would be carried out through the criteria of the Municipal Participation Fund (MPF), which is currently funded by a percentage of Income Tax (IT) and Industrialized Products Tax (IPT).
Let's examine where there is more to be taken from those who have more. Sports should receive special treatment because it is a sports bet. A small slice can be taken from Tourism, a small slice from Sports, a slice from other entities, as long as it benefits everyone," he said in an interview with Estadão.
Voting in the CAE
The vote on PL 3.626 in the CAE, where Senator Angelo Coronel is the rapporteur, was scheduled for last Tuesday (17th), but was postponed after the rapporteur failed to submit a report.
The senators attending the meeting requested the holding of a public hearing, which took place last Thursday (19). The topic has not yet been put on the committee's agenda, which will convene again next Tuesday (31).
