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Chile’s Internal Revenue Service (SII) director, Jorge Trujillo, has explained that it does not support or legitimize online gambling in its recent step to make the operators register and pay taxes if they carry out their activities within the country.
Speaking to the Senate’s Economy Committee, the head of the tax authority has dismissed criticism of its Resolution No. 69, which established a mechanism that would allow foreign online betting platforms to meet their tax obligations under Chilean laws. Indeed, the Supreme Court of Chile has recognized that such platforms do not have legal permission to conduct operations in the country.
However, Trujillo has clarified that this move aims to ensure that the taxes are paid, even though these entities may be engaged in an illegal activity. “Online betting companies are a clear activity that has attracted the attention of the SII. We verified that these operations are taking place and we have created a specific mechanism for collecting taxes“, Trujillo said.
In essence, the agency believes that it needs to collect the taxes that the operators owe since they provide their services to the citizens of Chile. Thus, no matter what the overall situation with the legality of these activities is, taxes need to be paid to the tax authorities.
Senator’s Criticism of Chile Online Betting Regulations
It turns out that there will be additional meetings held by the Senate’s Economy Committee in connection with the discussion about Chile’s online gambling regulations and taxation policies. According to reports, this step will be necessary in order to find out whether this measure means a sort of recognition of the industry.
Moreover, representatives from the Superintendence of Gaming Casinos (SCJ) have been invited to share their opinions in regard to this dispute. The Senate’s Economy Committee will also receive information on the position taken by the Supreme Court on this issue.
Clearly, the discussion of this problem grows, and more questions arise as a result. This can only indicate one thing: lawmakers will definitely want to address these issues and create a clear picture.
Tax Collection Equals Authorization of Activities?
Among the biggest critics of this decision is the senator who presides over the committee. Gastón Saavedra explains that Trujillo was invited to clarify why this resolution was adopted and what implications it might have in terms of regulation.
Specifically, he considers that this policy sends a false signal in terms of the legal standing of the online betting activities. “We consider this as a legalization of an activity that is illegal“, Saavedra said.
Similar concerns were expressed by representatives of Chile’s lower house, which also criticized the adoption of this tax collection policy. Congressman Diego Ibáñez shared his opinion according to which this practice should be understood as a legitimization of an illegal operation.
“Unfortunately, SII in this way is de facto legitimizing an illegal activity that was decided to be illegal in a supreme court ruling“, Ibáñez stressed. In addition, Ibáñez compared the adoption of this policy to the following situations: “That is just like if suddenly we started paying taxes to people who illegally sell food from the street, dog racing bets, drug trafficking, and contract killings.”
These analogies clearly show that the public discussion about online betting regulation in Chile has just begun.
The Urgency of Creating Special Legislation
As one may see, the current dispute raises many questions related to the online betting regulation in the region. Even though SII recognizes that foreign platforms continue working and providing their services to Chilean citizens, there are still no special legislative measures that would govern such operations.
Thus, SII maintains that taxes are to be collected regardless of the legality of the activities. However, lawmakers will most likely continue discussing this problem and receiving explanations from other relevant authorities.
Source: SBC Noticias
