Brazil’s tax revenue service is reviewing the requirement for fintechs to report transaction values due to concerns over money laundering. Robinson Barreirinhas highlighted evidence of illicit use of lesser-known payment services and emphasized the need for stricter account controls. Previous regulatory measures faced public backlash, leading to their suspension.
Brazil is set to revisit discussions regarding the obligation of financial technology firms to report transaction values to the tax revenue service. This move was highlighted by Robinson Barreirinhas, the head of the tax authority, during a Senate hearing. He indicated that there is substantial evidence suggesting lesser-known payment services have been exploited for laundering money.
Barreirinhas emphasized that the tax revenue service possesses intelligence capabilities for tracking financial transactions and intends to extend this oversight to fintech companies, a plan previously halted due to public opposition. He stated, “I don’t want to demonize fintechs … but the truth is that many end up being used (for illicit transactions) due to the ease of opening accounts.”
In September, a new requirement was introduced mandating fintechs to report transactions, including those made via the popular Pix instant payment system, starting January. This regulation aimed to align fintechs with traditional banks. However, opposition to President Luiz Inacio Lula da Silva’s government criticized this as an intentional attempt to impose additional taxes on workers, prompting the administration to suspend the regulation amid falling approval ratings.
Barreirinhas expressed concern over the financing of organized crime within Brazil, particularly regarding smuggled goods, cryptocurrencies, and online gambling. His statements underline the need for more stringent controls in the fintech sector in response to these illicit activities.
In conclusion, Brazil’s tax revenue service, under the guidance of Robinson Barreirinhas, is reconsidering the requirement for fintech companies to report financial transactions. This decision arises from concerns over money laundering practices within the financial technology sector. As Brazil balances governmental oversight with public sentiment, the implications of these discussions could significantly impact the operation of fintechs and their regulation in the country.
Original Source: www.usnews.com
