Brazilian Finance Minister Haddad warns betting companies that fail to pay taxes could face ban

Brazil’s Finance Minister Fernando Haddad has signaled that the government may move to ban betting companies from operating in the country if they fail to pay taxes, following the collapse of a key provisional measure aimed at raising taxes.

Haddad criticised misinformation surrounding the tax plan and called the taxation of BBBs (billionaires, banks and bets) as "only unfair in the minds of those who are uninformed." The measure, known as Provisional Measure (MP) 1,303, was rejected by the Chamber of Deputies this month. 

The government had proposed removing income tax exemptions for private investment bonds and debentures and taxing them at 5%, besides increasing the betting tax rate from 12% to 18%.

Speaking before the Senate Economic Affairs Committee, Haddad condemned betting operators for what he described as “disastrous” lobbying efforts that helped block the taxation proposal in Congress. The measure’s expiration dealt a major setback to the government’s fiscal plans, which projected nearly R$20 billion ($3.6 billion) in additional revenue for 2025.

Haddad compared the potential harm caused by the betting industry to that of alcohol and tobacco, stating that the government’s goal is not to criminalize the sector but to ensure it contributes fairly to public finances.

“Some things are difficult to ban, although in the case of betting we now have the technology to, if this arm-wrestling continues, move toward a tougher confrontation with the sector, which had a disastrous performance in the debates at the Chamber. Since they depend on social networks, we have ways to act,” Haddad said.

He confirmed that he plans to meet with President Luiz Inácio Lula da Silva and congressional leaders to explore alternative measures to compensate for the lost tax revenue. The discussions are expected to influence the 2026 federal budget, which the government has requested to postpone amid the growing fiscal gap.

The proposed delay drew criticism from lawmakers. Senator Efraim Filho, president of the Joint Budget Committee (CMO), said the government’s insistence on tax increases instead of spending cuts has strained relations with Congress.

“If the government faced frustration with the provisional measure, it must understand that it was due to the vote — it wasn’t imposed by anyone. It was the will of Congress, representing society, to send a clear message,” the senator said.

“We can no longer endure this agenda of raising rates and taxes just to collect, collect, and collect. Fiscal balance must also come from the spending side. Minister Fernando Haddad deals every day with a revenue agenda, but the spending-cut agenda seems to have been forgotten, pushed to the background,” he added.

Despite the legislative defeat, Haddad expressed optimism, noting that some lawmakers have since approached him seeking to revisit the proposal. He also warned that political consequences are already unfolding.