The city will allow taxpayers to make crypto payments through third-party service providers.
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The city of Rio de Janeiro is seeking crypto firms to operate its tax property seasoning in 2023, according to a decree published on Oct. 11, allowing taxpayers to use crypto alongside fiat currency to pay tributes. The move makes Rio the first Brazilian city to accept digital assets as payment for taxes.
It is expected that taxpayers will be able to pay with more than one crypto asset and that other types of taxes will be enabled in the future, the city stated. The decree also states that companies willing to provide the services must be registered with the city and comply with the Brazilian Securities and Exchange Commission (SEC) requirements.
The hired companies will provide cryptocurrency payment services and convert crypto into fiat currency. Funds will be transferred to the city in local fiat currency without any additional cost to taxpayers. Mayor Eduardo Paes said in a statement:
“Rio de Janeiro is a global city. Therefore, we are following technology and economic advances in the universe of digital financial assets. We have a look to the future and we want to become the country’s capital of innovation and technology. Our city is the first in Brazil to offer the taxpayer this type of payment.”
Similar actions have been taken around the world. In September, the United States state of Colorado started accepting crypto as payment for any taxes owed. The legislatures of Arizona, Wyoming and Utah have all introduced bills to accept tax payments in the form of digital currencies to varying degrees.
Rio de Janeiro’s initiative is another example of the efforts being made in the country to broaden adoption. Recently, the number of companies holding cryptocurrency in Brazil has reached record highs as of August, as the local taxation authority, Receita Federal do Brasil, recorded 12,053 unique organizations declaring crypto on their balance sheets in August, up 6.1% over July.