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Chile President Gabriel Boric along with his minister of finance have proposed a series of amendments to an online gambling bill advancing through the Chilean Congress, a sign that the President will not present an obstacle to legislation that was presented before he took office.
The online gambling bill was recently passed out of the Commission of Economy within Chile's Chamber of Deputies and is now being reviewed for amendments before being brought up before the full Chamber.
The President, a young leftist known for his ambitious sweeping tax reform agenda, came into office days after the gambling bill was introduced in March 2022. There was concern at the time that online gambling would take a back seat to his other tax reforms.
But prominent among the 91 pages of the government's suggestions are amendments to the proposed gambling tax regime.
Recommended for removal is a gambler’s winnings tax, which has been proposed at a rate of 15 percent. The President has suggested instead that bettors pay income tax on winnings and earnings must be reported to the Chilean tax service (SII) accordingly.
In addition, a proposed contribution to responsible gaming should be eliminated and replaced with a special tax surcharge of 1 percent of gross annual income.
An additional de facto licensing fee, which was previously 100 tax units (approximately US$6,500) would now be ten times the value at 1,000 UTM.
In addition, the President confirmed in his letter that a value added tax of 19 percent should apply, before the 20 percent tax on gross gaming revenue is levied.
Chilean gambling law Carlos Baeza said that adding VAT would put “a significant burden” on online gambling platforms, who would face an effective tax of 35 percent when VAT is applied alongside a tax on gross revenue.
“They are making a mistake in my view to add VAT to the online industry. We never had any sign that this was going to happen,” he told VIXIO GamblingCompliance.
Not all the proposed changes are bad news for the industry, however.
“One very good thing is that they eliminated the winnings tax. The truth is that this is something that we fought quite a lot and finally it was accepted,” Baeza said.
