Senator Randolfe Rodrigues, PT government’s leader in Congress, confirmed that the proposal previously dropped after the expiry of Provisional Measure 1303/2025 will be reintroduced in the Budget Guidelines Law (LDO).
The plan, driven by Finance Minister Fernando Haddad, aims to raise R$35bn (€6.2bn) for the 2026 budget through a levy on what he calls “billionaires, banks and bets.”
Haddad argues the measure is both a matter of fairness and of public health, insisting that companies profiting from Brazil’s fast-growing online gambling market must contribute more to the nation’s coffers.
But the political appetite for new taxes is fading. The Joint Budget Committee has once again delayed its vote on the LDO, citing the lack of consensus over spending cuts and new sources of revenue. Lawmakers warn that Congress “can no longer bear a tax-hiking agenda”, accusing the government of fixating on collection rather than reform.
The delay underlines Lula’s enduring dilemma — how to sustain his ambitious social programmes without unsettling markets or alienating an already restless Congress, as the year-end budget deadline draws ever closer.
The budget timeline has become perilously tight. Lula’s Workers’ Party (PT) will likely need to embark on another round of horse-trading with Brazil’s fragmented political blocs to secure passage of the Budget Guidelines Law before the year’s end.
Few deputies wish to be held responsible for a tax rise — no matter how virtuous the cause of funding Lula’s flagship welfare programmes. The government’s fiscal credibility now hinges on its ability to strike a deal without reigniting tensions within Congress.
For Lula and Haddad, the effort to impose new taxes on betting companies has taken on a personal dimension. Both men were humiliated last month, as their initial plan to lift the tax rate on gross gaming revenues (GGR) from 12% to 18% collapsed in the Chamber of Deputies after months of negotiation. The setback was all the more stinging given that Haddad had believed the deal was sealed.
Less than 24 hours before the vote, PT deputy Carlos Zarattini inserted a controversial clause that would have applied a retroactive tax framework, dubbed “Litígio Zero Bets” — a mechanism never before used by Brazil’s Receita Federal.
The move blindsided allies, unnerved the markets, and ultimately led to the proposal’s defeat by 251 votes, leaving the government’s fiscal reform agenda in disarray.
The fallout was swift. Lula’s opponents mocked the administration’s lack of coordination, while centrist blocs accused the PT of trying to rewrite tax law on the fly.
Haddad, already under pressure to deliver revenue, saw his credibility within Congress dented. The failure deepened scepticism over whether the government can shepherd complex reforms through a legislature that thrives on political bargaining.
Still, the fight is far from over as licence holders in the Bets regime have been warned.. On 13 October 2025, PT chamber leader Lindbergh Farias introduced a new bill proposing to double the gambling tax rate to 24% of GGR.
This move is currently under review by the party leadership. The measure signals that the government remains intent on squeezing more from the sector, even if the political cost rises.
Ultimately, the final judgement will fall to Haddad, who must determine what level of taxation can survive Brazil’s political arithmetic — high enough to meet fiscal targets, yet modest enough to pass.
For now, Lula’s gamble on gambling taxes remains just that: a high-stakes bet on his government’s ability to turn fiscal resolve into legislative success in which no one wants to flog a dead horse.
Dingnews.com 22/10/2025