Executive Branch Pressed to Address Tax Inequality in Sports Betting – Urgent Breaking News
Tax Law Under Fire as Sports Betting Houses Challenge Equal Treatment
The Executive Branch faces a critical deadline to address concerns over tax inequality in the sports betting industry. Prominent tax lawyer José Verona has advocated strongly for changes, warning that as it stands, the current selective consumption tax (ISC) law is discriminatory and encourages unfair competition.
Judiciary Backs Betting Companies in Tax Dispute
Many sports betting houses have resorted to legal actions, known as am actions, arguing that the application of the ISC tax as per DL 1644 is unjust and discriminatory. The Judiciary has stated in several cases that these claims have merit and the taxes have been suspended for these companies, potentially disrupting the current regulatory framework.
Legal Expert Warns of Serious Risks
“This DL is a discriminating rule because for foreign companies it requires that the ISC is paid by the player, but Peruvian companies assume this cost, leading to obvious unfair competition,” said Verona. As he explains, the current law jeopardizes the viability of businesses by making them pay ISC on non-existent monies, essentially bonds granted to players, which poses a significant threat to economic stability and employment.
Verona added, “MEF acknowledged that this tax could undermine the sector’s entire operation, risking thousands of jobs. Fortunately, Congress has corrected this harmful rule to prevent further litigation.”
Questions of Constitutionality hinge on ISC Law
One crucial aspect highlighted by Verona is that DL 1644 did not explicitly include sports betting in its ISC law, opening the possibility for companies to challenge the tax’s validity. He asserts that businesses have strong constitutional grounds to argue that the ISC levied on their activities lacks essential components for its enforcement.
The Pressure Mounts
The government has until the end of this week to promulgate a new law, modifying Law 31557 and addressing the issues raised. “We cannot allow the situation to continue as it risks destabilizing the industry and invalidating existing regulations,” Verona emphasized.
The Bigger Picture
Understanding the scope of this news requires a broader context. Historically, Latin American countries like Peru face complex regulatory environments particularly in sectors undergoing rapid growth, such as online gaming. As other countries finalize their tax policies for digital businesses, the response and actions by Peru’s Executive Branch will likely set a precedent for future regulatory decisions throughout the region.
Next Steps
The industry and government officials are now awaiting the Executive’s actions. “Assuming the law changes within the July deadline, companies will need to adapt swiftly,” said Verona. “Monitoring ongoing legal developments will be crucial for business continuity.” Verona advises companies to remain vigilant and seek expert legal counsel to navigate this uncertain tax landscape effectively.
