The Brazilian government has announced a new blockchain network in an attempt to combat corruption in public expenditures by effectively tracking them. The network was launched at an event, streamed on YouTube, that came after a partnership agreement was signed by the Uniam Court of Accounts (TCU) and the Brazilian Development Bank (BNDES). The move is part of Brazil’s interest in taking the lead in integrating blockchain technology into its public administration system and helping to improve both efficiency and traceability in the process.
According to a Press Release Released by TCU ahead of Monday’s launch event, the Brazilian Blockchain Network is still in development but will be used by a number of government organizations in an effort to improve the services provided to citizens and provide better transparency on public spending.
“The network, public and non-profit, will be national in scope and will connect participating organizations in a governance structure and technology infrastructure with the aim of facilitating adoption.” blockchain technology in solutions towards the public interest”, read release when translated from Portuguese, verbatim.
The launch of the Brazilian Blockchain Network also comes at a time when Brazil’s tax authority, the Brazilian Federal Revenue Department (RFB), has passed a law requiring investors to pay personal income tax when they exchange one digital currency into another.
According to a separate report of CoinGeek, the law specifies that even if digital currency transactions do not involve the Brazilian Real or any other fiat currency, any profits derived from the transaction are subject to tax.
“Capital gain is calculated when selling electronic money, when one is used directly to purchase another, even if the previously acquired cryptocurrency is not converted into reais or other fiat currency, will be taxed by Personal Income Tax, at rates progressive rate, in accordance with the provisions of the law. 21 of Law No. 8.981, January 20, 1995,” it reads.
However, the law will not apply to all traders. RFB limits reporting requirements to transactions exceeding 35,000 reals (approximately Rs. 5.6 lakh). The RFB states that the statement came after consultations that began last year.
