Chile online gambling launch stalled due to tax concerns

Progression toward Chile’s online gambling marketplace launching has stalled due to political conflicts surfacing over outstanding tax concerns.
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Progression toward Chile’s online gambling marketplace launching has stalled due to political conflicts surfacing over outstanding tax concerns.

Chile’s Ministry of Finance agreed to finalize a Gambling Bill at the beginning of the year that would be voted on by year’s end, with plans to launch the country’s regulated online gambling by 2023.

Government agencies were alerted by the Ministry to update and formalize further legislation on compliance duties, advertising, and welfare to support the Gambling Bill’s ascension into law – policy conditions needed to safeguard Chile’s soon-to-be reformed gambling marketplace.

Chile’s National Congress backed the Gambling Bill’s passage, as the Ministry revealed it wishes to collect $55m in taxes per year as well as shut down 900 unlicensed websites on the black market.

Back in March, the Ministry demonstrated its confidence in executing its timetable, as it published the Gambling Bill’s licensing criteria and tax framework, proposing that foreign and domestic operators could apply for a fixed five-year license, priced at a ‘Chilean Unit Amount’ of 1000 UTMs or 100 UTMs each six months.   

It also advised that licensed operators would be subject to a 20% gross income tax that would replace national VAT charges. Publishing its plans, the Ministry thought the tricky hurdle of settling the market’s tax affairs had been cleared. 

Yet, an Economic Commission for Chile’s Chamber of Deputies stated this week that the proposed taxes need to be reviewed, citing concerns of policy stakeholders – Superintendent of Gambling Casinos Vivien Villagrán, the Undersecretary of Finance Claudia Sanhueza, and the Head of the Policy Unit Rodrigo Ajenjo

The Commission added that review was deemed necessary as the Ministry had been judged to have presented an insufficient tax framework for Chile to launch its online gambling.

Critics also argued that the Ministry failed to explain how the country’s local and commercial taxes would be applied to international operators, who should be subject to equal tax terms as domestic incumbents.

Policy stakeholder Sanhueza underlined her support for the Gambling Bill, but noted that: “a diagnosis of the tax framework had demonstrated visible flaws.”  

It was also reported by Chilean Media that the Chamber had sent instructions to the Ministry to present an updated tax framework that addressed the local tax concerns, which would be reviewed in the fourth quarter. 

Chile’s National Congress also continues to wait on further legislation related to advertising and welfare policies approved by the Chamber of Deputies.