After a recent overnight debate session, the 2021 Budget which increases taxes on online gambling from 2% to 5% has been approved by the Argentinian Chamber of Deputies. Now, the budget awaits the full approval from the Senate.

While the largest opposition party Juntos por el Cambio didn’t vote, the Government obtained the 139 votes needed to pass this project, with the support from the Interbloque Federal, the Interbloque Unidad Federal para el Desarrollo and more.

The Argentinian State Lottery Association (ALEA) raised concerns over the project as it argues that “any tax on official gambling at a national level favors the expansion of illegal gambling, by increasing the tax pressure on the regulated sector.”

In addition, the association assured that this increase “directly affects the local economies since it reduces the income that the provinces and the City of Buenos Aires obtain from gambling through regulatory entities, in their respective jurisdictions. It also decreases the funds allocated to social entities.”

Currently, each province in Argentina has its own regulation and gambling is not regulated on a federal level. Consequently, ALEA believes that it’s wrong to apply a tax that affects the entire country.

The tax, which was enacted on a 2016 law, is applied to the value of each bet and game of chance. In addition, it rises to 10% for companies that operate from “non-cooperating or low-no taxation” countries, or tax havens.

The national Government projects a 5% GDP growth in the 2021 Budget, in a year that the country will need to deal with several talks with the IMF and the reconstruction of the economy.