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Lawmakers could make decision on Lula’s vetoes in April

By - 1 April 2024

The President of the Senate, Rodrigo Pacheco, stated that Congress could be able to convene in a joint session to decide on the 28 presidential vetoes pending analysis in April. The list includes President Lula’s vetoes to Law 14,790.

The law was sanctioned and published in the Official Gazette of the Union on December 30, 2023, with vetoes on certain parts of the text. The sections vetoed by the president will need to be re-evaluated by  lawmakers, who may choose to restore the deleted parts of the text. Rodrigo Pacheco could opt for a joint session between federal deputies and senators to expedite the vote.

President Luiz Inácio Lula da Silva sanctioned online sports betting and casino games on December 30. The measure was published in an extra edition of the Official Gazette of the Union. The original bill provided that prizes up to BRL 2,112 (the limit of the lowest Personal Income Tax bracket) would be exempt from taxation but this was vetoed by the President. The change was made so that the Federal Government would not promote “Income Tax taxation different from that applied in other lottery modalities, thus establishing a tax distinction without plausible justification.”

However this was particularly controversial with The National Association of Games and Lotteries (ANJL) warning that charging Income Tax at source on net prizes paid to winners of sports betting and online games has the potential to attract bettors to illegal websites. Talking to Brazilian newspaper Correio, the ANJL argued that if the vetoes on the sections that provide for annual tax collection are kept in place then the government could lose out on significant tax revenue. The ANJL advocates that the 15% Income Tax rate on winners’ prizes be collected through the declaration made annually by the taxpayer.

As well as vetoing the tax exemption on player bettors’ winnings President Lula also vetoed proposed standards for the authorization of commercial promotion and the filing of complaints, investigations and accountability related to the distribution of prizes and draws of up to R$10,000.

The Congress has the opportunity to review and decide whether to uphold or override the vetoes. In order to override them, Congress needs a vote of the absolute majority of its members – two-thirds majority in both the Chamber of Deputies and the Federal Senate.

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