Senate to Vote on Haddad’s Projects to Regulate Sports Betting and Boost Fiscal Revenue in 2024
November 21, 2023
This Tuesday, the Senate will begin the assessment of two proposals that constitute President Luiz Inácio Lula da Silva’s (PT) economic package to increase revenue in 2024. These projects, previously approved by the Chamber of Deputies, address the regulation of the online sports betting market and establish rules for the taxation of offshore investments and exclusive investment funds for high-income individuals.
The commitment to vote on these texts was announced by the President of the Senate, Senator Rodrigo Pacheco (PSD-MG), last week. This comes amid ambiguous statements from Lula and government members regarding the possibility of changing the fiscal target for the next year.
The Senate President reiterated Congress’s commitment to pursue the fiscal target set by Finance Minister Fernando Haddad, aiming for a zero deficit in the Union’s accounts, spending only what is collected and kept in the treasury, without increasing public debt.
Finance estimates that an additional R$168 billion in revenue will be needed to achieve a zero deficit, and the approval of the sports betting and offshore projects is part of the ministry’s priorities to reach that goal.
Regulation of Sports Betting:
The project addresses the taxation of prizes and online sports betting houses, establishes operating fees, and sets rules for sector advertising. Already approved by the Chamber, the text will be voted on by the Senate’s Committee on Economic Affairs (CAE), as announced by Pacheco, and is expected to be sent for plenary voting on the same day. The project deals with fixed-odds betting on real sports events, with rules defining operation in Brazil, including a R$30 million license for betting houses, an 18% tax for these houses, and up to 30% for prizes won by bettors.
Taxation of Offshore Investments and Exclusive Funds:
The second project, to be analyzed by the Senate’s CAE, addresses the taxation of offshore investments (earnings obtained outside Brazil) and exclusive investment funds for high-income individuals. Offshore taxation will occur once a year, on December 31, with a 15% rate. Exclusive funds will be taxed twice a year, with a variable rate of 15% for long-term funds and 20% for short-term funds.
These proposals are part of the government’s efforts to achieve the established fiscal target, directly influencing the calculation of the spending cap in the new fiscal framework, which includes triggers to limit spending growth.
