Brazil's Congress has successively passed the PLP 128/2025 fiscal bill in the short term, proposing to cut federal tax incentives and gradually increase the tax rates for industries such as gambling. The bill has been submitted to the president for approval. This adjustment covers multiple areas including gambling and financial technology, and detailed policy interpretation can be accessed through the PASA official website.
Phased Increase in Gambling Tax, New Revenue Directed to Public Welfare
The tax rate for gambling operators will gradually increase! The current gross income tax rate of 12% will be raised to 13% in 2026, 14% in 2027, and finally reach 15% in 2028. The additional tax revenue will be proportionally distributed, half for social security and the other half for the medical sector, both increasing fiscal revenue and supporting public welfare. However, due to constitutional provisions, the higher tax rate will only take effect after a 90-day buffer period.
Enhanced Accountability for Illegal Gambling, Multiple Parties Bear Joint Tax Liability
Those involved in illegal gambling need to be cautious now! The bill specifies that entities advertising for illegal gambling platforms, or financial and payment institutions that continue to process transactions for them after receiving official notifications, will bear joint tax liability. This regulation significantly tightens the supervision of illegal gambling, cutting off its lifeline from advertising and financial flows, and enhancing industry compliance.
Adjustment of Tax Rates in the Financial Sector, Covering Various Institutions
The tax rate adjustment is not one-size-fits-all! For financial technology companies and capitalized companies, the net profit social contribution rate (CSLL) will increase from 15% to 17.5% before 2028, and further to 20% starting in 2028. Exchanges, clearing institutions, and other financial entities will see their tax rates gradually increase from 9%, reaching 12% by the end of 2027, and 15% in 2028. Additionally, the withholding tax on shareholder equity interest will also increase from 15% to 17.5%, expected to have a fiscal impact of 2.5 billion reais.
Tax Incentives with Exceptions, Setting GDP Proportion Limits
The bill sets multiple exceptions for the reduction of tax incentives, with areas enjoying constitutional exemptions such as religious entities, political parties, and books unaffected, as well as the Manaus Free Trade Zone, basic food basket, and housing education projects. It also stipulates that if the total amount of tax incentives exceeds 2% of GDP, new incentives cannot be added, expanded, or extended unless compensatory measures are in place. Currently, Brazil's annual tax incentive scale is approximately 800 billion reais.
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This article is from "PASA-Global iGaming Leader" gambling industry news channel:https://t.me/pasa_news
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