Brazil considers taxing cryptocurrencies to mitigate the impact of rising financial transaction taxes

According to Bitcoin.com, the Brazilian government is considering taxing cryptocurrency transactions to alleviate the social impact of the increase in the Financial Transactions Tax (IOF). After the government announced the increase in IOF tax rates on May 22, House Speaker Hugo Motta proposed in a public speech to include cryptocurrencies in the taxation scope, but emphasized that the proposal has not yet been finalized. This proposal has sparked controversy in the Brazilian cryptocurrency industry. Vanessa Butalla, Vice President of Legal Affairs at Mercado Bitcoin, pointed out that according to the current regulations of the Brazilian tax authority, imposing IOF on cryptocurrencies is equivalent to taxing investment properties and lacks legal basis. Daniel de Paiva Gomes, a partner at law firm Paiva Gomes, further emphasized that only congressional legislation can classify cryptocurrencies as taxable assets, and the government only has the authority to adjust tax rates and deadlines.