Chilean Deputies Vote to Block Tax Collection on Unauthorized Online Gaming

Chile’s Chamber of Deputies has approved an indication to prohibit the Internal Tax Service (SII) from using resources to implement tax collection mechanisms for online gaming platforms not authorized in the country. This measure, passed during the discussion of the Ministry of Finance’s allocation in the 2027 Budget Law project, received significant parliamentary backing.

What Happened

The Chilean Chamber of Deputies approved an indication yesterday aimed at preventing the Internal Tax Service (SII) from dedicating resources to establish or manage tax declaration and payment mechanisms for online gaming platforms not authorized to operate within the nation. The proposal, which was debated during the Ministry of Finance’s budget discussion as part of the 2027 Budget Law project, garnered extensive support in the Chamber, with 133 votes in favor, two against, and one abstention, according to SBC Noticias.

The processing of this indication was preceded by a procedural controversy. Initially, the Chamber’s Secretariat deemed the indication inadmissible, citing potential infringements of constitutional provisions. However, the Chamber subsequently overturned this ruling through a vote, allowing the proposal to be discussed and ultimately approved by a wide margin. The text, now incorporated as a new clause in the SII’s budget, explicitly states that “resources from the Internal Tax Service may not be allocated to the implementation or administration of tax declaration and payment mechanisms regarding online betting platforms or other activities not authorized to operate in Chile,” as reported by La Tercera.

Key Details

• The Chamber of Deputies approved the measure with 133 votes in favor, two against, and one abstention during the 2027 Budget Law discussion, according to SBC Noticias.
• The indication specifically prohibits the SII from using its resources to implement or manage tax collection mechanisms for unauthorized online betting platforms, as reported by G5noticias.
• Deputies Eduardo Cretton and Marco Antonio Sulantay announced in October their intent to use the budget discussion to halt tax collection on these platforms, questioning an SII resolution from June that established a digital VAT payment mechanism, according to Emol.
• The measure will now proceed to the Senate for review, while separately, the Senate’s Economic Commission recently approved two bills seeking a definitive ban on online gaming platforms, as reported by Panorama Online.

Why It Matters

This parliamentary action signals a significant legislative effort to address the legal status of online gaming in Chile. By preventing the SII from collecting taxes on unauthorized platforms, deputies argue against legitimizing operations that have faced judicial scrutiny. The move also highlights a divergence in regulatory approaches within the Chilean legislature; while the Executive Power has proposed regulation and taxation, various senators are pushing for an outright prohibition of online gaming, according to Panorama Online.

The legislative debate underscores the complexities surrounding the regulation of online gaming in emerging markets. The deputies’ decision could influence future discussions on formalizing or restricting these activities, impacting both operators currently serving the Chilean market and the government’s potential tax revenue from the sector. The ongoing legislative process in both the Chamber and the Senate indicates a dynamic regulatory environment for online gaming in Chile.

What’s Next

The approved indication will now proceed to the Senate for review. Concurrently, the Senate’s Economic Commission has already approved two separate legislative initiatives, proposed by Senators Paulina Núñez, Gastón Saavedra, and Diego Ibáñez, which aim to definitively prohibit online betting platforms. These two motions, due to their shared objectives, are slated to be merged in a subsequent session, according to SBC Noticias.