Brazilian Senate committee approves higher taxes on operators

Brazil's Senate Economic Affairs Committee (CAE) has approved a project that raises taxation on online operators and fintechs companies, advancing one of the Government's key revenue priorities.

The proposal, approved by 21 votes to 1, increases the overall tax burden on the GGR of licensed betting companies from 12% to 18%.

The initial draft proposed an even sharper increase to 24%, but the main official, Senator Eduardo Braga, scaled it back after negotiations.

The text also raises taxation on fintech companies by altering the CSLL rate.

These elements restore parts of a previous provisional measure that expired after failing to pass through the Chamber of Deputies.

The Government has since been attempting to recover segments of the proposal to reinforce federal revenue.

The official's revised version sparked tension during the session, as Braga criticized the Ministry of Finance for withdrawing support for certain provisions.

Most of the projected revenue gain is expected to come from the betting sector.

The increase will be gradual: from 12% to 15% in 2026 and 2027, reaching 18% only in 2028.

Braga justified abandoning the earlier proposal to double taxation, stating concerns that a steep increase "could harm companies already operating legally."

The project also targets unregulated operators. It creates a fast-track mechanism for blocking illegal operators and mandates that financial institutions monitor and report suspicious activity linked to unlicensed platforms.

Banks and payment firms that fail to act may face fines or even temporary suspension.

The Brazilian Institute of Responsible Gaming (IBJR) has replied to the tax increase saying the measure could fuel the illegal market and that the Government should focus its efforts on curbing such operators instead of further taxing the legal ones.

If the Bill faces no appeal to the Senate plenary, it will move directly to the Chamber of Deputies for further debate.