WinZO opens shop in Brazil as Indian gaming tax forces company to diversify
Along with the international expansion, WinZo also plans to invest $25 million to expand and build the Brazilian gaming market.
Interactive entertainment and gaming platformis entering Brazil as the Indian government's 28% goods and services tax (GST) comes into effect.
"The expansion comes at a pivotal moment in India’s gaming ecosystem as companies explore ways to steer through challenges posed by a 400% hike in the GST, which threatens the survival of most content/ IP creators in their nascent stages," the company said in a statement.
This will help the company diversify its revenue streams as the new GST regime threatens to increase its tax obligations by 300-400%. Along with the international expansion, WinZO also plans to invest $25 million to "expand and build the Brazil gaming market."
WinZO will also help 100 partner game developers to export games such as carrom, chess, car race etc to Brazil. Along with this, WinZO will also launch and represent the first-ever India Pavilion at the Brazil
Game Show—the largest gaming show in Latin America.
The finance ministry had announced the implementation date of October 1 for the amended GST law provisions targeting e-gaming, casinos, and horse racing.
These amendments, introduced in the Integrated GST (IGST) Act, made it compulsory for offshore online gaming platforms to register in India and pay taxes in accordance with domestic laws.
On July 21, a group of prominent investors, including Peak XV Partners, Tiger Global, DST Global, Bennett, Coleman & Company Limited, Alpha Wave Global, Chrys Capital, and Lumikai, wrote a letter seeking the Prime Minister's intervention in the decision made by the GST Council. This decision was anticipated to negatively impact prospective investments totalling $4 billion over the next 3-4 years.
In August, Mobile Premier League (MPL), a real money gaming platform, laid off approximately 350 employees, which constituted roughly 50% of its workforce. According to reports, Sai Srinivas, MPL's Co-founder, attributed the new GST regime targeting gaming companies as one of the causes behind this round of workforce reduction.
In an internal email addressed to all employees, Srinivas stated that the 28% tax imposition would escalate MPL's tax liability by 350-400%.
Edited by Affirunisa Kankudti