In the wake of an overnight debate, the Argentinean Chamber of Deputies approved a tax increase for online gambling as part of the 2021 budget. The process moves on to the Senate for a vote.
The tax, recommended by Minister of Finance Martín Guzmán, increases from 2 percent to 5 percent. The tax applies to the value of each bet and game of chance. The tax will be reduced by 50 percent for firms with investments in the country linked to the sector.
To compensate, there will be an increase in the rate to 10 percent for companies based abroad and will climb to 15 percent if they also have an operating base in a so-called tax haven, according to Games Magazine Brazil.
This comes at a time when the two most populated jurisdictions—the city and province of Buenos Aires—are launching their markets. Other locations have yet to approve regulations, according to SBCNews.
The proposal said 95 percent of the revenue will be distributed among provinces, while 5 percent will be invested in technological innovations by the Argentinean state telecommunications company Arsat. According to Política Online, online gambling generates around $2.4 billion annually in Argentina, but contributions to the state don’t exist due to a lack of regulations. At present, each province has its own regulation; gambling is not regulated on a federal level. Consequently, ALEA believes that it’s wrong to apply a tax that affects the entire country.
According to the 2021 budget, the government will check bank and billing data and will identify online bets when it’s detected in a mobile phone code on a SIM card or in the IP address of the electronic device of the service recipient.
The Argentinean State Lottery Association (ALEA) raised concerns over the project as it argues that “any tax on official gambling at a national level favors the expansion of illegal gambling, by increasing the tax pressure on the regulated sector,” according to SBCAmericas.
The association also said the increase “directly affects the local economies since it reduces the income that the provinces and the city of Buenos Aires obtain from gambling through regulatory entities, in their respective jurisdictions. It also decreases the funds allocated to social entities.”
