Brazilian Government to Present New Proposal to Tax Betting Companies and Billionaires After IOF Bill Rejection

The previous MP, which was intended to serve as an alternative to increasing the IOF (Tax on Financial Operations), was withdrawn from the Chamber of Deputies’ agenda and expired on October 8, undermining the economic team’s fiscal plan for 2025.

Two Fronts: Taxation and Spending Cuts

According to Rodrigues, the new text to be submitted by the Finance Ministry will divide the measures into two distinct blocks — one focused on taxation and the other on spending control — to make the debate clearer for Congress and society.

“We will separate the measures related to spending from those related to taxation. I think that’s a more didactic way to talk to Brazilians,” said the senator.

He explained that the government intends to adjust the approach, maintaining the line of negotiation previously discussed with Congress but with greater clarity regarding revenue sources and expenditure reductions.

Betting Operators and Billionaires in the Spotlight

Randolfe reiterated that the government will insist on taxing betting companies and billionaires, defending differentiated rates based on the type of betting activity, with higher taxes for games considered more harmful to public health, such as online casinos and “Tigrinho”-type platforms.

“Betting companies must be taxed for public health reasons, not merely for government revenue. Some should be taxed, while others — the more harmful ones — should even be banned,” he stated.

The senator mentioned international models to justify a stronger taxation approach:

"In the United States, it’s 50%. In the state of New York, it’s 51%. So, it should be a set of measures, but separately,” he explained.

Randolfe also highlighted that the government intends to move forward with the taxation of large fortunes, noting that Brazil has only 55 billionaires who, according to him, “have never been taxed.”

“Congress and society will decide whether or not they want to tax betting companies — and even expand the debate on harmful forms of gambling — and whether billionaires shouldn’t contribute a little more,” he said.

Spending Control Measures Back on the Table

In addition to tax changes, the new package is expected to revive measures already agreed upon in the previous MP’s joint committee, particularly those related to public spending containment.

“We don’t want anything beyond what has already been agreed upon in Congress. The spending control measures were approved by the mixed committee and even had the support of the opposition,” said Randolfe.

He emphasized that the government will present the proposals in a clear and structured way, separating taxation and spending to facilitate dialogue with Congress and the public.

Background: MP Rejection and Fiscal Challenges

The withdrawal of the MP that was meant to replace the IOF increase occurred after a vote in the Chamber of Deputies, with 251 votes in favor and 193 against the removal of the bill from the agenda. As a result, the measure expired, leaving the government without an immediate alternative to balance public finances in 2025.

The proposal had been a key part of Finance Minister Fernando Haddad’s fiscal plan, aimed at achieving a zero-deficit budget in 2025 and a 0.25% primary surplus of GDP in 2026, an election year.

Now, Haddad and his team are racing against time to present a new arrangement capable of restoring the government’s fiscal credibility and generating revenue without harming the regulated betting market — a sector that, though recently legalized, already moves billions and is seen as strategic for balancing public accounts.