By Marcela Ayres
Brazil's Senate Economic Affairs Committee on Tuesday approved a bill to raise taxes on online betting firms and the income of fintechs and payment institutions starting next year, but watered down government plans to tax high-value dividends.
The move still needs to be approved by the full Senate, if an appeal forces a floor vote, and then by the Lower House.
The higher taxes are seen as key to help President Luiz Inacio Lula da Silva's administration meet its 2026 goal of a primary budget surplus equal to 0.25% of GDP.
Brazil's tax revenue service did not provide an estimate of the fiscal impact.
The approved bill revived parts of a controversial government measure that expired without a vote, but now phases in tax hikes more gradually.
Offsetting some of those gains, the bill also eases expected revenue from dividend taxation.
The tax on dividends sent abroad and on domestic payments above 50,000 reais ($9,374) was meant to offset broader middle-class income-tax exemptions starting in January.
BY THE NUMBERS
The so-called CSLL tax on payment institutions' income will rise from 9% to 12% in 2026 and to 15% from 2028.
The CSLL for credit, financing and investment fintechs and capitalization firms will increase from 15% to 17.5% in 2026 and to 20% from 2028.
Banks will continue to face a 20% CSLL rate.
Tax on gross gaming revenue for online betting firms will climb from 12% to 15% in 2026 and to 18% from 2028.
Tax on shareholder remuneration via interest on equity will rise from 15% to 17.5%.
EXTENDED DIVIDEND WINDOW
Income tax exemption on profits and dividends will now apply to 2025 earnings approved by companies until April 30, 2026, instead of until December 2025 as previously established.
The change aligns the tax treatment with accounting rules, since companies may disclose fourth-quarter results as late as April of the following year.
Senator Eduardo Braga, the bill's sponsor, said the Finance Ministry did not want to extend the dividend window because this would result in lost revenue.
Two government sources, on the other hand, said the December deadline is triggering a rush by firms to approve dividends before year-end to preserve their tax-exempt status.
Such concentration has potential currency implications as it could affect dividend-related outflows from the country, they said.
Firms that recently announced dividend approvals as part of early distributions include Vale BMFBOVESPA:VALE3, Itau Unibanco BMFBOVESPA:ITUB3 and Axia Energia BMFBOVESPA:AXIA3.
($1 = 5.3339 reais)