Brazil Withdraws Retroactive Betting Tax Plan After Lawmakers Reject Proposal

The Chamber of Deputies of Brazil has scrapped Provisional Measure 1,303/2025, a proposal that would have allowed the government to collect retroactive taxes from betting operators that ran before market regulation. The measure, tied to a broader fiscal reform effort, failed to gain enough support and quietly expired this week.

Good to Know

• The plan aimed to raise up to BRL 20.9 billion ($3.9 billion) by taxing past operations.
• The 18% GGR rate applied for only eight days before returning to 12%.
• The Ministry of Finance now faces a BRL 42.3 billion gap through 2026.

The measure was designed as an alternative to increasing the national Financial Operations Tax and was pushed by Finance Minister Fernando Haddad as part of the 2026 fiscal target plan. It was expected to deliver new revenue while reducing spending by about BRL 10.7 billion.

However, the idea never caught on in Congress. After a narrow 13-12 committee approval, lawmakers rejected it in a 251-to-193 vote, ensuring the proposal would not move forward to the Senate.

A late amendment added a voluntary settlement program requiring operators to pay 15% in taxes and 15% in fines on revenue from 2014 to 2024 — a total charge of 30%. The government hoped this would help recover unpaid taxes from offshore and unlicensed betting operators active before the market was formalized.

Since the measure remained in force for only eight days, the practical effect was minimal. During that brief window, operators were temporarily subject to the higher 18% gross gaming revenue tax before it reverted to 12%.

The Ministry of Finance must now deal with an estimated shortfall of BRL 42.3 billion through 2026. Senator Renan Calheiros, who chaired the joint committee that reviewed the proposal, said the withdrawal could “affect public finances” and weaken Brazil’s fiscal balance.

Opposition leader Rogério Marinho saw it differently, calling the vote “a win against excessive taxation.” He argued that the government should focus on cutting expenses instead of finding new ways to raise money.

Officials inside the Ministry of Finance still want to recover unpaid betting taxes and have not ruled out another proposal in the future. Market observers believe the idea of retroactive taxation will likely resurface in a modified form, although the timing is unclear.