A recent legislative proposal in Peru seeks to increase the selective consumption tax (ISC) on online wagers to 5%, a substantial rise from the current rate of 1%. The initiative, introduced by the Civic Works Party's parliamentary group, exclusively impacts online betting, leaving land-based gambling unaffected.
This proposed tax would be in addition to the existing 12% gaming tax that applies to the gross gaming revenue (GGR) of remote gaming and sports betting operators, regardless of whether they are based in Peru or overseas.
If enacted, the law would become effective the day after its publication in El Peruano, the country's official newspaper, with the new tax rate taking effect from the first day of the following month.
Peru's regulated online gambling market began in February 2024, attracting global players like Stake, Rush Street Interactive, and Betsson. However, the optimism surrounding the market has been tempered by the introduction of the 1% ISC on July 1, 2025. This was an unexpected change, as an earlier proposal to implement a consumption tax had been dropped prior to the market's launch. Legal experts have commented that further tax increases could be detrimental to market stability.
The push to elevate the ISC to 5% stems from both public health considerations and a desire to bolster government revenue. The bill emphasizes the surge in digital betting and its correlation with gambling addiction, stressing the need to protect vulnerable groups, particularly the youth. According to the Ministry of Health, 14,409 cases of gambling addiction treatment were reported at health facilities nationwide in 2025. The bill suggests that increasing the ISC could help advance public health initiatives without seeking to eliminate online betting in Peru.
The proposal claims that the higher tax rate could generate approximately S/1.62 billion, up from the current annual revenue of around S/324 million ($94.1 million) at the 1% rate. However, these figures are described as a static, illustrative scenario.
The bill also draws comparisons with other Latin American countries, noting that many already impose additional taxes on online betting. For example, Argentina's indirect taxes range from 2.5% to 15%, and Colombia currently imposes a 16% VAT on GGR for online operators. The draft legislation argues that raising the ISC to 5% is not an exorbitant rate within the regional context.
The potential increase could affect both operators and bettors, but the precise implications are still unclear. Operators might choose to absorb the tax increase, pass it on to bettors, or adopt a hybrid approach. In Colombia, for example, some operators have mitigated the effects of similar tax increases by offering bonuses that offset the VAT burden for players.
