The city will let taxpayers pay using cryptocurrencies through third-party service providers.
According to a regulation released on October 11, the city of Rio de Janeiro is seeking crypto businesses to administer its tax property beginning in 2023, letting taxpayers use bitcoin alongside fiat currencies to pay taxes. This action makes Rio the first city in Brazil to accept digital assets as a tax payment.
The city expects that taxpayers will be able to pay with several crypto assets and that other tax kinds will be authorized in the future. The ordinance also stipulates that service providers must be registered with the city and conform to the criteria of the Brazilian Securities and Exchange Commission (SEC).
The contracted firms will offer payment services for cryptocurrencies and convert cryptocurrencies to fiat cash. The city will get the funds in local fiat currency at no further expense to taxpayers. Mayor Eduardo Paes made the following statement:
“Rio de Janeiro is a worldwide metropolis. Consequently, we track technological and economic developments in the universe of digital financial assets. We have an eye on the future and want to become the nation’s innovation and technology capital. Our city is the first in Brazil to give this form of reimbursement to taxpayers.”
Similar measures have been adopted around the globe. In September, the U.S. state of Colorado began accepting cryptocurrency as payment for taxes. To differing degrees, the legislatures of Arizona, Wyoming, and Utah have all sponsored proposals to accept tax payments in digital currencies.
The initiative of Rio de Janeiro is another illustration of the efforts being made in the nation to expand adoption. The local taxes office, Receita Federal do Brasil, registered 12,053 distinct entities reporting cryptocurrencies on their balance sheets in August, an increase of 6.1% from July.
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