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House approves video games framework in Brazil

The lower house of Brazil’s Congress approved a bill yesterday’s establishing a legal framework for the country’s video games industry, seeking to correct the massive tax disparity between games and computer equipment.

The bill seeks to regulate the manufacture, import, sale, and development of video games, as well as entertainment services linked to games around the country. With House approval, the proposal will now move on to the Senate for analysis.

Average taxation on video games is 72 percent, and the bill would equate levies to those applied on computing equipment. This would allow the sector to benefit from tax cuts and breaks that made computer hardware and software cheaper in Brazil over the last 20 years.

However, the financial impact of the measure is not yet clear, which is why Jair Bolsonaro’s economic team is not in favor of the proposal. Even so, government leaders in the House voted to approve it.

The bill also includes definitions of video games, mobile apps, and software developed for fantasy game entertainment.

The Brazilian video games industry has seen 169-percent growth in the last four years, with the number of homegrown developers increasing from 375 to 1,009, according to video game developers’ association Abragames.

Another important aspect of the bill is that it does not require any specific qualifications or licenses from programmers and developers working in the industry, due to the fact that a large part of the sector is made up of self-taught professionals.

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