June 09, 2025
By Our Correspondent
Brazil is thinking about taxing cryptocurrency transactions to lessen the impact of an executive order that would raise the current tax on financial transactions, which would have a wider impact, amid a public discussion against the move.
In Brazil, cryptocurrency transactions are now in the news and are playing a significant role in the larger financial discussion surrounding taxes. The public reacted negatively to a set of amendments the Brazilian government made on May 22 that raised the country’s current tax on financial transactions (IOF).
The potential inclusion of cryptocurrency in this tax to lessen its impact on a wider target is being discussed by MPs as they consider their next steps to deter the administration from taking this course of action.
This notion was put up by Chamber of Deputies President Hugo Motta in a public speech before to a meeting with Senate President Davi Alcolumbre and Finance Minister Fernando Haddad.
Local media reports that Motta was outspoken in his opposition to the raise, saying that the Brazilian people could not tolerate yet another tax increase while endorsing the notion of applying the tax to cryptocurrency transactions.
However, he recognized that this was only a suggestion and that a decision had not yet been made. The concept elicited conflicting responses from the Brazilian cryptocurrency community, with some arguing that it would be unlawful.
This could not be accomplished because of the way the Brazilian tax office handles cryptocurrencies, according to Vanessa Butalla, vice president of legal, compliance, and risks at Mercado Bitcoin. She emphasized that it would be similar to choosing to charge IOF on a home bought for investment purposes.
Since this executive order cannot alter the existing law, Daniel de Paiva Gomes, a partner at Paiva Gomes Advogados, informed Valor Economico that any tax collection resulting from it would be unlawful. He emphasized that the government may only set rates and deadlines and that only a law passed by the National Congress could alter the definition of the taxable event to include a new class of assets as taxable.
