Taxpayers in Rio de Janeiro can use third-party service providers to make cryptocurrency payments.
According to a decree released on October 11 that permits taxpayers to use cryptocurrency in addition to fiat cash to pay taxes, Rio de Janeiro is looking for crypto companies to run its tax property collection effort in 2023. As a result, Rio is now the first Brazilian municipal to accept digital assets as a tax payment.
The city indicated that in the future, more taxes will be made possible, as well as the ability for taxpayers to pay with more than one cryptocurrency asset.
The ordinance further stipulates that businesses wishing to offer the services must register with the city and adhere to SEC (Securities and Exchange Commission) of Brazil regulations.
The contracting businesses will offer cryptocurrency payment services and perform cryptocurrency to fiat currency conversions. As a result, taxpayers will not incur additional costs as money will be transferred to the city in local fiat currency. In a statement, Mayor Eduardo Paes stated:
Rio de Janeiro is a world-class metropolis. As a result, we keep track on technological and economic developments in the world of digital financial assets. We are looking to the future and wish to become the nation's innovation and technological capital. The first municipality in Brazil to provide the taxpayer with this kind of payment is ours.
Around the world, similar acts have been done. Colorado, a state in the United States, began accepting cryptocurrency as payment for unpaid taxes in September. To differing degrees, bills to accept tax payments in digital currencies have been introduced in the legislatures of Arizona, Wyoming, and Utah.
The program from Rio de Janeiro is another illustration of the efforts being made in the nation to increase adoption. As of August, there were 12,053 distinct entities declaring cryptocurrency on their balance sheets, up 6.1% from July, according to the local tax body Receita Federal do Brasil, signalling that the number of businesses holding cryptocurrencies in Brazil has just reached new highs.