Strict tax laws holding back Brazil game industry

Strict tax laws holding back Brazil game industry
Aaron Lee

By Aaron Lee

November 21st 2012 at 11:15AM

Brazilian developers warn piracy isn't the only issue choking its sector

Strict tax laws are holding back Brazil’s games sector, say some of its native developers who are calling for change.

For games specifically, Brazil has “excessive” amounts of tax, according to Brazilian game makers Develop has spoken to.

“Labour laws in Brazil are pretty heavy for the entrepreneur. Whenever we hire new personnel, we must pay their salary, plus 100 per cent in tax. This makes our costs higher than countries such as Canada, US or Australia,” said Werther Azevedo of Nano Games.

Fernando Pepe Barbalho Pereira of São Paulo’s Mayness Studios adds: “Unfortunately in Brazil we have an excessive amount of taxes, especially for games and related services. Besides taxes, investors are not so confident to invest in a market that was stagnant during prior periods and also the unstable economy.”

Developments in the international market, in relation to the stabilisation of the Brazilian economy, have helped to improve the things, but pressure remains on the Government to recognise the industry’s potential.

Tax isn’t the only social and politic issue the nation’s development sector has had to deal with. As well as piracy, there has also be “a grave corruption problem”, explains Azevedo.

However, Brazil Games Show director Marcelo Tavares has believes positive change is coming: “Nowadays, piracy is decreasing and the companies are starting news offices and factories in Brazil. On the other side, the economy in all sectors is growing and international events like the World Cup Finals and the Olympic Games are a great example of the growth here.”

You can read more on the Brazilian games market in Develop’s Region Focus.