ProntoPaga, a Chilean cross-border payments processor, said it will suspend services to online betting platforms registered with Chile’s tax authority that fail to pay their digital VAT.
The announcement came ahead of Tuesday’s deadline set by the Servicio de Impuestos Internos (SII) for registered operators.
Teresita Valverde, ProntoPaga’s General Counsel, said: “As a responsible company in the digital payments ecosystem, we cannot allow our services to be used by companies that fail to meet their tax obligations. This decision is firm and without exceptions.”
The company added that customers who comply “can continue using the fintech’s services without inconvenience.”
The payment mechanism stems from a resolution that lets foreign betting, gambling, and casino platforms declare and pay taxes on their operations in Chile.
Registered platforms must pay the VAT owed for the past 36 tax periods. In September, the SII told the Senate Economy Committee that 39 platforms had registered, all on quarterly payments, with the first payment due in October.
Carolina Saravia, SII Deputy Director of Enforcement, said: “The estimate we have for this first payment is a little over $100m.”
Jorge Trujillo, SII director, said: “Enabling a platform to pay the proper taxes does not in any way validate the execution of this type of activity.”
Subtel, the telecommunications undersecretariat, has meanwhile blocked 42 betting sites under rulings by the Supreme Court and the Santiago Court of Appeals.
The bill to regulate the industry is still in Congress after receiving amendments from the Executive. Its original text proposed a 31% specific tax on gross revenue and a cooling-off period during which platforms could not operate.
Senators have criticized those amendments. Gastón Saavedra, Chair of the Senate Economy Committee, said: “They are extremely lax, permissive. If there is no will to regulate, it is better to prohibit.”
Chile’s digital VAT rate is currently 19%
