Haddad proposes to reinstate consensual parts of the fiscal bill rejected by Congress.
Finance Minister Fernando Haddad proposed to Senate President Davi Alcolumbre (União Brasil-AP) to recover elements considered consensual from the Provisional Measure on tax increases that was rejected by the Chamber of Deputies. The suggestion was presented this Wednesday (15) during a meeting at the Senate's Official Residence, amid the postponement of the vote on the Budget Guidelines Law (LDO) in the Joint Budget Committee (CMO).
The discussion is taking place at a critical moment, as the minister insists on readjusting the taxation of sports betting and online gaming platforms, even threatening to ban betting altogether, while organizations and experts warn about the risks of this potential readjustment.
The case of the Netherlands serves as a worrying example: the Dutch gambling regulator, Kansspelautoriteit (KSA), reported a 16% drop in gross gaming revenue (GGR) from the regulated online sector in the first half of 2025, compared to the same period of the previous year. The total value was approximately €600 million, as disclosed in the Autumn Market Report, marking the first annual reduction since the market opened in October 2021.
After the meeting, Haddad explained to journalists that approximately 70% of the content of Provisional Measure 1303 did not generate disagreement among parliamentarians. "One of the things I have been advocating, and I did this with President Hugo [Motta, President of the Chamber of Deputies] and now with President Davi [Alcolumbre], is that a large part of Provisional Measure 1303 was uncontroversial," he said.
The minister detailed which points of the original measure had broad support in Congress. “Every part regarding registration control, everyone agreed. The issue of regulating [tax] compensation, everyone agreed. There wasn't even an amendment about that because everyone understood that it made sense. It's a large part of the provisional measure, more than 70%,” he added.
Since Provisional Measure 1303 was shelved in the Chamber of Deputies, the government will need to send a new bill with these specific points to try to get them approved. The strategy seeks to minimize the impact of the defeat suffered last week, when the Chamber rejected the measure that included, among other things, the taxation of betting houses.
Finance Minister Fernando Haddad indicated that the federal government may resort to prohibiting the operation of betting houses in Brazil if they fail to comply with their tax obligations. The statement was made during a public hearing at the Senate's Economic Affairs Committee, in response to the government's defeat with the expiration of the provisional measure that provided for the taxation of betting.
"There are things that are difficult to prohibit, although in the case of betting we have the technology today to, if this tug-of-war continues, engage in a firmer confrontation with the sector, which had a disastrous participation in the debates in the Chamber, because they are dependent on social networks, so we are in a position to act," the minister declared during the hearing.
The National Association of Games and Lotteries (ANJL) contested the minister's statements, especially the characterization that taxing bets would "reduce privileges," that criticism of the increase would be the result of "misinformation," and that there would be a "tug-of-war" between the sector and the government. In an official statement released this Wednesday (15), the entity stated that "the sector's dialogue has always been conducted with institutional respect and a common commitment to strengthening the regulated market."
ANJL also emphasized that "it's not just 12% in taxes that betting sites pay. In fact, the 12% only represents the payment of taxes calculated on the difference between bets placed and prizes paid. After this payment, betting sites have operating costs and pay all other taxes that a normal company would pay."
Haddad compared the effects of gambling to those of cigarettes and alcohol, stressing that the goal is not to demonize the sector, but to ensure its proper tax contribution. Initially, Provisional Measure 1303 had proposed increasing the tax rate on bets from 12% to 18%, but during the processing of the provisional measure, the rapporteur withdrew and suggested in the final report a retroactive collection of taxes due for the year 2024.
The Brazilian Institute for Responsible Gaming (IBJR) also spoke out, warning that proposals to raise taxes on regulated betting companies could strengthen the illegal market in the country. In a statement released this Thursday (16), the association representing the main companies in the gaming sector in Brazil stated that “the insistence on raising the tax burden on platforms that operate legally in the country, including proposals that would double the current rate, does not strengthen the newly regulated sector. On the contrary: it encourages the growth of the illegal market.”
The minister stated that he will speak with President Lula and parliamentary leaders to discuss alternatives to the measure, which would generate approximately R$ 20 billion for public coffers next year. Due to these negotiations, the government requested the postponement of the vote on the 2026 budget, which was scheduled for this Wednesday in the joint committee.
The chairman of the Joint Budget Committee (CMO), Senator Efraim Filho, criticized the federal government's stance. "And if the government experienced the frustration of the provisional measure, it's important for the government to know that it was through a vote, not imposed by anyone. It's a desire of Congress, which represents society, to send a clear message. We can no longer tolerate the agenda of increasing rates, increasing taxes, just to collect, collect, and collect."
Fiscal balance is also achieved through spending cuts. Minister Fernando Haddad discusses revenue collection every day, but it seems that the agenda of spending cuts has been forgotten, relegated to the background,” the senator stated.
According to a study by LCA Consultores, in partnership with the Locomotiva Institute, cited by IBJR, between 41% and 51% of bets in Brazil still occur on unauthorized platforms, generating around R$ 40 billion per year and resulting in an estimated loss of R$ 10,8 billion in revenue. "For every 5 percentage points of market formalization, the country could collect approximately an additional R$ 1 billion," the study highlights.
In her column published in the newspaper O Globo, journalist Miriam Leitão commented on the situation: “Beyond the fiscal impact of this decision by Congress, what we are witnessing is parliamentarians yielding to the interests of a sector that it makes no sense to spare. Betting houses are making huge profits and should pay more taxes, as happens in other countries. But part of Congress chose not to confront this agenda.”
The Dutch experience, however, suggests caution. After the tax rate increased from 30,5% to 34,2% starting in January of this year, the regulated market shrank significantly. The KSA report points to a possible migration of players to unregulated platforms, with the proportion of licensed GGRs relative to the streaming service decreasing from 51% in December to 49% in January, indicating growth in the illegal market.
Despite the setback, Haddad expressed optimism about the possibility of reversing the situation, stating that several parliamentarians have already approached him with the intention of correcting what happened.
Risk of increased taxation with the Income Tax Exemption bill.
Another risk of increased taxation on betting lies in the processing of the proposal for Income Tax (IR) exemption in the Senate, under the rapporteurship of Senator Renan Calheiros (MDB-AL).
Senator Renan Calheiros (MDB-AL) stated in an interview with Folha de S.Paulo this Thursday (16) that “controversial points” in the project that increases the Income Tax (IR) exemption for those who earn up to R$ 5.000 can be removed from the text and sent for separate processing, in parallel. The objective, he explains, would be to preserve at least the “core of the project” and guarantee the sanction of President Lula before the end of the year.
The senator points out that the version approved by the Chamber shielded, for example, income obtained from securities such as Real Estate Credit Notes (LCIs) and Agribusiness Credit Notes (LCAs) and Investment Funds in Agro-industrial Production Chains (Fiagros). He adds that the lack of provision for compensation runs up against the Fiscal Responsibility Law (LRF).
According to Renan, one of the possible compensations could be an increase in the tax rate on bets, which was foreseen in Provisional Measure 1303, overturned by the Chamber of Deputies.
"If the Senate decides that it can incorporate some of these compensations, they will not cause the bill to return to the Chamber of Deputies; they will be separated and sent to the Chamber to be processed as a parallel bill," says Renan, who on Thursday led a public hearing on the income tax bill with workers' unions.
Asked in an interview with Estadão if fintechs and betting companies could be taxed, the senator stated that “there are many amendments in that sense. And the Chamber, as I already said, created a precedent of exempting funds, bonds and Fiagros, in addition to dividends registered until December 31st. Things that can, evidently, distort the project itself. These things will be resolved. The Senate cannot proceed without preventing these things that are unconstitutional, that do not have the necessary compensations, from moving forward, from becoming valid.”
Calheiros, a political opponent of Congressman Arthur Lira, stated that the rapporteur of the proposal in the Chamber was lenient with the upper class.
“I think he was condescending and tried to be much more, but the Senate's mobilization ended up frustrating that expectation he himself had. For example, he announced that he would protect the bets, because the bets were also included in the provisional measure. And he ended up leaving that aside, only protecting the funds and the (financial) letters,” he commented.
Government leader cites spending cuts and bets as an alternative to the impacts on the accounts in 2026.
The government leader in Congress, Senator Randolfe Rodrigues (PT-AP), stated this Thursday (16) that the Planalto continues to seek alternatives to compensate for the impact on the 2026 accounts and should support projects related to spending cuts, increased taxation of bets and seeking a review of tax exemptions.
The senator also confirmed that the Treasury will continue to defend the increase in sports betting.
"Increasing the taxation of betting is always on this government's agenda. It's unacceptable that we have a 12% tax on betting, while in the United States, most American states have 50%," he said.
