Brazil's legal gambling operators may need to prepare to "pay a bit more." The country's Senate Economic Affairs Committee (CAE) recently approved a bill that plans to gradually increase the tax rate on gambling companies, aiming to reach 18% of total gambling revenue (GGR).
Three-step approach: Tax rate adjustment schedule
This bill, numbered PL 5,473.2025, was passed in the committee vote with an overwhelming majority of 23 votes in favor and 1 against. Its core content is clear: to provide a buffer period for the tax increase.
Specifically, the "three-step" plan is: starting from 2026 and 2027, the tax rate will increase from the current 12% to 15%; by 2028, it will finally be raised to 18%. This scheme is much milder compared to the initial draft proposal of a 24% aggressive tax rate. Some legislators worry that doubling the tax rate all at once might scare players and revenue into the illegal market.
Political and financial considerations behind the tax increase
Why is the government so persistent in raising gambling taxes? There are clear fiscal and political considerations behind this. Brazil will hold a general election next year, and the Lula government is striving to achieve fiscal targets through various means. Previously, a government initiative to increase gambling taxes by 50% was just rejected, which was somewhat "embarrassing" for the authorities and prompted them to push the new tax increase plan more quickly.
According to the bill, the increased tax revenue will mainly be used for social security, especially in the healthcare sector. However, during the period from 2026 to 2028, the federal government has the right to decide to transfer these additional resources to state, federal district, or municipal governments. Analysts believe that in Brazil, a relatively conservative country in some respects, "increasing taxes on billionaires and the gambling world" is a good rhetoric for winning votes.
Next steps and industry focus
Currently, the bill has passed the Senate committee and will next be submitted to the House of Representatives for final deliberation. If passed and enacted, the new tax rate will officially take effect on the first day of the fourth month after its announcement.
For Brazil's developing gambling market, this is an important regulatory signal. The gradual adjustment gives operators some time to adapt, but the ultimate increase in tax burden will undoubtedly affect the industry's profit structure and competitive landscape. The industry will continue to monitor the final fate of the bill and its impact on the growth of legal and illegal markets. For more in-depth analysis of global gambling regulation and tax policies, follow PASA's official website.
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