Brazilian Lawmaker Proposes Ending Crypto Taxation

Brazilian lawmaker Eros Biondini has introduced a draft bill aimed at eliminating the taxation of cryptocurrencies, particularly for individuals who hold Bitcoin (BTC) as a long-term store of value. The bill, filed in the Chamber of Deputies, seeks to remove clauses in the tax code that explicitly mention the taxation of cryptoassets. Additionally, it calls for the abolition of a 2023 law that outlines the collection of income tax from profits derived from cryptoassets.

The bill will first be reviewed by a Chamber of Deputies committee, which will decide whether to pass it on to the lower house. If approved, it could then proceed to the Senate and the office of the President, both of which have the power to veto the bill. Biondini argues that imposing new taxes on financial transactions, including foreign exchange and insurance transfers, is ill-timed, especially during a period of economic fragility. He criticizes the government's crypto policy, stating that Brazil is not leading the world in crypto adoption but rather going against the trend. Existing and future crypto tax laws, according to Biondini, penalize individuals seeking a legitimate, safe, and sovereign store of value.

Biondini has previously authored a bill that seeks to formally recognize Bitcoin as a strategic store of value in Brazil. This proposal aims to create tax exemptions for BTC buyers and holders and to outline citizens' rights to become self-custodians of their coins without relying on crypto wallet operators. The lawmaker has also taken to social media to rally support for his bill, suggesting that if the topic gains traction, the lower house would be pressured to reject efforts to boost crypto tax revenues in Brazil. He has called on fellow parliamentarians to back his bill, emphasizing that it is designed to defend taxpayers, industry players, and Brazil's economic sovereignty.

In November of the previous year, Biondini unveiled a bill proposing the creation of a national Bitcoin reserve. The plan called for the government to convert up to 5% of Brazil’s international reserve fund to Bitcoin. This move underscores Biondini's commitment to promoting Bitcoin as a strategic asset for the country. The lawmaker's efforts reflect a broader push within Brazil to recognize the potential of cryptocurrencies as a viable financial tool, despite the current regulatory challenges.