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„Maybe I don’t even need to, maybe I’ll give up… I hate taxes,“ says Paulo Guedes on CPMF of digital transactions

Paulo Guedes says he hates tax and may go back on his proposal to create a new tax for digital transactions

Economy Minister Paulo Guedes said he could give up the creation of a tax for digital transactions.

In this way, the creation of a new tax, which has been called a new „CPMF“, can be left aside after major clashes between government and Congress.

Guedes‘ declarations were made to CNN Brasil.

The minister also stressed that the tax, so defended by him, may not even be necessary.

„The media, for example, wants to exonerate the [payroll], doesn’t it? This tax would only come in if it were to be exonerated. Maybe it doesn’t even need to, maybe I’ll give up,“ Guedes said.

Not today, but in the future

However, although Guedes said for the first time that he could give up his idea of a tax on digital transactions, he said that in the future this would be inevitable.

After all, according to him, the digitisation of the economy is inevitable, and so a digital economy has to have a tax on this dimension too.

„Everyone recognises that the digital dimension is here to stay and that the growth of the tax base will be digital,“ he said.

But although the tax is new, Guedes said that the government has never sought to create a new tax, but to replace existing taxes in a new configuration.

„We had hoped to close a deal with the states. And hence, the promise to exonerate the payroll so that the service and trade sectors, which are responsible for generating 75 percent of jobs in Brazil, would have that compensation. I would never think of that tax. I hate taxes, let alone new taxes,“ he said.

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The minister also said that all digital transactions would be taxed at 0.2 percent.

Thus, as the minister commented on the proposal, transactions to buy and sell Bitcoin and cryptomoedas in exchanges, as well as the purchase of tokens and even transactions in Pix would be taxed.

However, the minister’s statements broadened the range of what could be taxed as he said that all „information traffic“ in digital services would pay the new tax.

„That’s why I always said it wasn’t just a return from the CPMF. That tax does not even go through banks. It transcends. It is a digital infovia. If you are using a digital infovia that the government has made available free to all Brazilians, it can charge a small tax for information traffic,“ said the minister.

The creation of the tax for digital transactions would be presented in the so-called fourth phase of the Tax Reform that would have to be approved by Congress.

However, so far, only the text of the first phase has been presented and has no deadline to be analyzed and voted on.