According to a Brazilian news outlet, Rio de Janeiro’s city hall has released an order in its Municipal Gazette stating that city officials would work with businesses that specialise in converting crypto assets into fiat currency to enable inhabitants of Rio to pay an IPTU property tax (the Urban Building and Land Tax).
Brazilian IPTU payments on real estate are calculated based on the property’s market value. Residents of every municipality in the country are subject to this tax, which brings in revenue for state governments. Taxpayers have two payment options for their IPTU obligations: monthly payments or a single lump sum payment annually.
According to the local government, its agreements with cryptocurrency businesses would enable “the municipality to receive 100% of the value” of cryptocurrency payments in fiat without adding “additional cost” to city hall. The idea for the experiment originated from Rio de Janeiro’s pro-crypto Mayor, Eduardo Paes, who earlier this year said he was looking into ways to allow Rio to start holding cryptocurrency in its treasury.
“Rio de Janeiro is a global city. As such, we are following the technological and economic developments in the world of digital financial assets. We are looking to the future and we want to help [Rio] become the country’s capital of innovation and technology,” commented the Mayor on the latest developments. Later he also claimed that Rio de Janeiro is the first city in Brazil to “offer this type of payment option to taxpayers.”
He added that Rio was “already ahead” of a few other Brazilian regions that are also considering tax payment systems driven by cryptocurrencies. Paes also mentioned the potential for providing consumers with incentives or bonuses for electing to pay their IPTU bills with bitcoin back in January (BTC).