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BRAZIL CONFIRMS‘ UNACCEPTABLE’ TAX HIKE
GIBRALTAR The European Commission has removed Gibraltar from its list of high-risk jurisdictions, following its prior removal from the Financial Action Task Force( FATF)‘ grey list’. The change follows years of work from the peninsula to update and improve compliance efforts. Gibraltar’ s removal is now at the mercy of the European Parliament, which will vote on the updated list.
BAD TIMES
B razil’ s sports betting tax is expected to increase from 12 % to 18 % of GGR, to make up for losses elsewhere in the country’ s tax system. Finance Minister Fernando Haddad confirmed this increase on 8 June, following a meeting with the presidents of the Chamber of Deputies and the Senate.
The increase has been heavily criticised by industry trade body the Brazilian Institute of Responsible Gaming( IBJR), which dubbed it“ unacceptable”. It said it would make it impossible for some companies to continue to operate in the legal market, which has already collected BRL2.3 billion($ 415.3 million) in licensing fees since its January launch.
Of that 18 % tax rate, 6 % will be allocated to social security and health contributions, while the other 12 % will be split among other sectors, such as sports and education.
Remote betting is not the only sector impacted by tax changes as the new package will see income tax rises for real estate and agricultural businesses. The package replaces initial plans to increase the financial transactions tax( IOF) rate from 0.38 % to 3.5 %. The IOF applies to foreign transactions, and changes can be applied immediately, unlike many other tax changes.
On top of the GGR-based tax, betting operators in Brazil also make federal social contributions based on their revenue. But this system is expected to be replaced by a tax on, and contributions from, goods and services.
SPREADEX The Gambling Commission handed Spreadex a fine of £ 2 million($ 2.6 million) in May, after ruling it had breached several anti-money laundering and social responsibility regulations. Failures were identified during a compliance assessment in July 2023. Spreadex’ s money laundering and terrorist financing risk assessment fell short and failed to consider key customer, product, geographic and payment risks, as required by the commission.
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