Peru government sends back law to amend the application of excise tax for online gambling

The Peruvian Government, headed by President Dina Boluarte, sent back a bill that amends the application of the Selective Consumption Tax (ISC) for bets placed on domestic and foreign iGaming platforms.

The law, which had been approved by the full Congress in mid-June, also established as a crime the rigging or manipulation of sports results. Following the observation, the text returns to Parliament for possible modification or approval by insistence.

In an official letter sent to Parliament, signed by Boluarte and the Prime Minister, Eduardo Arana, the Executive argued that "there is no normative vacuum in the regulation of the ISC on remote games and sports betting provided by non-domiciled companies," as accused by different online operators.

Furthermore, they warned that the changes proposed by the amendment to the IGV and ISC Law “considerably decrease the taxable base of the Selective Consumption Tax, therefore, if it is not accompanied by a simultaneous adjustment in the ISC rate that reevaluates the tax burden of the tax, this modification would entail a substantial lower tax burden of between 90% to 95%."

The Peruvian Congress

"The enactment would generate a serious impact on the ISC collection. Changing the taxable base without adjusting the rate would reduce the collection to only between 5% to 10% of the current potential: with the proposal, between PEN 14 million to PEN 28 million would be obtained annually vs. PEN 284 million potential with a rate of 1% in force," the letter explained.

"By doing so, much of the effectiveness of the tax tool to produce improvements in the welfare of the part of society affected by the damages of this activity would be lost," it added.

Match-fixing

On another point, the Government also indicates that the classification of the rigging of sports results as a crime “is anti-technical in criminal matters”, since it would frame as computer crimes events that are already defined in the Penal Code.

The regulation approved by Congress establishes that rigging to obtain benefits in sports betting would be a computer crime. However, for the Executive, it would be a bribery crime.