Brazil's Senate has approved legislation increasing taxes on betting operators and fintech companies while cutting federal tax incentives by 10% across multiple sectors, marking a further step in the Government's effort to tighten public spending and boost fiscal revenues.
The bill passed with 62 votes in favor and six against and now heads to President Luiz Inácio Lula da Silva for final approval.
Under the new framework, the tax rate on betting operators will rise gradually from the current 12% to 13% in 2026, 14% in 2027 and 15% in 2028. Half of the additional revenue will be allocated to social security and the remaining portion to public health initiatives.
The measure comes as Brazil continues to refine its newly regulated online betting market, adding a new fiscal layer for licensed operators.
The legislation also strengthens enforcement mechanisms by establishing joint liability for advertisers promoting unauthorized betting platforms, as well as for financial institutions that continue providing services to unlicensed operators after receiving formal notification from authorities.
Fintech companies and capitalization societies will face higher taxation under the bill. Their Social Contribution on Net Profit (CSLL) rate will increase from 15% to 17.5% through December 31, 2027, and to 20% from 2028 onward. In addition, taxation on interest on equity will rise from 15% to 17.5%.
Government leader in Congress Senator Randolfe Rodrigues, who served as author for the bill, said the proposal aims to reduce tax incentives while improving oversight and transparency.
He said: "This is a proposal that points to the reduction of incentives, to greater transparency and control over values, moving toward greater fiscal responsibility and, at the same time, combating distortions caused by the lack of evaluation of such measures."
The 10% reduction in tax benefits will apply to federal taxes, import duties and employer social security contributions. Exemptions will remain in place for the Manaus Free Trade Zone, basic food products, philanthropic entities, Simples Nacional, the Minha Casa Minha Vida housing program and technology sector incentives.
The bill also establishes a ceiling on tax incentives, preventing the creation, expansion or extension of new benefits if total incentives exceed 2% of Brazil's GDP, unless offsetting measures are adopted. According to Government estimates, existing tax incentives currently total around 800 billion reais per year.
During the debate, Senator Tereza Cristina raised concerns about the potential impact on agricultural inputs, warning that reduced subsidies could place upward pressure on food prices. Despite those reservations, she voted in favor of the proposal.
Most provisions are set to take effect on January 1, 2026, with specific measures subject to a 90-day implementation period.
Industry analysts warned that piling taxes on Brazil's licensed gambling market could undermine operator viability and fuel illegal play
