In Peru, the debate about charging taxes on online betting and iGaming has come to a critical point. More than a month has passed since the government said it would observe, or disapprove, the proposed law to address shortcomings in the levying of the Selective Consumption Tax (ISC) on online betting platforms. The decision has placed the industry in suspense and opened the door for possible litigation.
Experts think the current system, established by Legislative Decree 1644 and with the involvement of the Ministry of Economy and Finance (MEF), was poorly designed and is exposing the state to serious financial risks. As the Peruvian Congress discusses whether or not to approve the bill by insistence, operators can exploit this legal ambiguity to challenge the already paid taxes and seek refunds that amount to millions of soles.
Risk of Judicial Challenges
Carlos Mesía, a former president of Peru’s Constitutional Court (TC), has been vocal about the implications of this legislative gap. He notes that the government’s refusal to endorse the new law ultimately benefits online gambling operators, who remain legally empowered to appeal to the judiciary or the TC. In his analysis, the absence of a solid legal basis leaves the ISC vulnerable to being overturned in court.
Mesía warned that, should the courts side with the companies, the Peruvian state would be forced to reimburse substantial amounts already collected under the current regime. Such a scenario would not only weaken public finances but also undermine the credibility of the government’s fiscal policy.
Read the full article
