Brazil: Minister Hoffmann renews call to increase taxes on betting amid PT leadership transition

Brazil's Minister of Institutional Relations, Gleisi Hoffmann, reiterated her call for higher taxes on banks and betting companies during the National Meeting of the Workers' Party (PT) in Brasília, an event that also marked the appointment of Araraquara mayor Edinho Silva as the party’s new national president. President Luiz Inácio Lula da Silva attended the gathering, which concluded the party’s internal election process.

Speaking to party members, Hoffmann touched upon the need to reform Brazil's tax system to reduce inequality. “We need to fight injustice in Brazil. It’s unacceptable that the very rich don’t pay taxes while the burden falls on the poorest. This level of concentration cannot continue,” she said.

Hoffmann praised the party’s efforts to advance legislation exempting income tax for individuals earning up to R$5,000 (approximately US$900), and called for continued efforts to shift the tax burden.

“Once again, you led us. You sent important bills to Congress, like exempting income tax for those earning up to R$5,000. The PT is to be congratulated for this campaign. We need to tax banks and betting companies. And this semester, we face challenges in Congress: voting on income tax and the ‘Bets’ amendment,” she said.

The proposed tax hike on the betting sector is outlined in a Provisional Measure (MP) that targets sports betting and online gaming operators. The MP proposes raising the tax on Gross Gaming Revenue (GGR) from the previously legislated 12% to 18%, representing a 50% increase.

If enacted, the measure would push the total tax burden for operators to over 55% when combining federal and local taxes. Industry associations warn that such a level would make operations economically unfeasible for many companies. They argue that some licensed firms may exit the market, while others in the licensing process through the Secretariat of Prizes and Betting (SPA) might cancel their applications.

Associations also caution that an overly aggressive tax framework could incentivize the growth of unregulated betting platforms, which typically offer more competitive odds due to their ability to avoid tax obligations. These illegal operators, they say, could gain further traction among players, eroding government revenue and consumer protections.