A legislative proposal in Peru seeks to raise the selective consumption tax (ISC) on online wagers to 5%, a significant jump from the current 1% rate. This initiative, brought forth by the Civic Works Party, would exclusively apply to online betting, leaving land-based gambling unaffected.
The revised ISC would function independently of the current 12% gaming tax imposed on the gross gaming revenue (GGR) of remote betting and gaming operators. Moreover, this tax increase would apply uniformly, regardless of whether the gambling operators are based in Peru or overseas.
Should the proposal pass, the law will become effective the day after its publication in El Peruano, Peru's official daily newspaper, with the new 5% tax rate taking effect from the first day of the subsequent calendar month.
Renewed concerns over taxation in Peru come in the wake of the country’s regulated online gambling sector, which launched in February 2024. This market has attracted considerable international interest, with operators such as Stake, Rush Street Interactive, and Betsson obtaining licenses to operate.
While the launch marked a notable success, some optimism has been tempered by the implementation of the current 1% ISC since July 1, 2025. An earlier proposal to introduce a consumption tax was initially rejected before being revived in 2024, prompting warnings from legal experts about its potentially detrimental effects on market stability.
The justification for increasing the ISC to 5% encompasses two primary motivations. First, the proposal underscores the explosion of digital betting and its ramifications for public health, especially concerning gambling addiction and safeguarding younger populations.
According to the bill, the Ministry of Health recorded 14,409 instances of treatment for gambling addiction at health facilities across Peru in 2025, which emphasized the need for enhanced prevention, early diagnosis, and specialized treatment initiatives. The proposed measure aims to contribute to a comprehensive strategy for averting gambling-related issues by elevating the specific tax burden associated with the activity, positioning this tax not as a primary solution to gambling addiction but rather as part of a broader framework that includes prevention, regulation, and care.
Additionally, the proposal notes that the ISC serves a revenue-generating purpose without intending to outlaw online betting. Instead, it aims to moderately increase the fiscal implications tied to the activity within a strictly regulated market. The revenue potential from raising the ISC to 5% is considerable; while the tax at its current level of 1% generates about S/324 million ($94.1 million) annually, the bill estimates that this figure could swell to S/1.62 billion at the new rate—though these figures are recognized as merely “static, illustrative scenarios.”
The bill also draws comparisons with other Latin American countries, which have established similar additional taxes alongside their primary tax obligations. In Argentina, for example, online betting operators face an indirect tax between 2.5% and 15%, while Colombia imposes a 16% VAT on GGR for online operators. In this context, the proposed 5% ISC in Peru is framed as an ordinary rate for the region.
The increase in the ISC could impact both operators and bettors, although the exact effects remain unclear. The bill acknowledges that operators may choose to absorb the tax increase, shift the entire or partial cost to bettors through altered betting conditions, or distribute the tax burden between themselves and the consumers. For instance, some Colombian operators have managed to soften the blow of the additional tax by offering players bonuses that mitigate the VAT's impact on their costs.
