Retail investors cry! Brazil cancels tax exemption on crypto assets, imposing a unified income tax of 17.5%.

Brazil's Provisional Decree 1303 went into effect, imposing a full 17.5% cryptocurrency income tax and eliminating the original 35,000 reais (about $6,300) exemption, with small investors bearing the brunt. (Synopsis: Brazil passes draft bitcoin reserves: up to 5% foreign exchange deposit to buy BTC, which is expected to become a precedent for G20 countries) (Background supplement: Michael Sellor on "All in Bitcoin" decision: COVID-19 made it clear to me that the dollar and gold are fake) Brazil's interim decree No. 1303 went on the road on June 14, local time, stipulating a 17.5% income tax on all personal cryptocurrency profits, which used to be about 35,000 reais per month (approx $6,300) is officially abolished. In the past, a progressive tax rate of 15% to 22.5% was adopted, and only high-value transactions were subject to high taxes, but now the tax rate has been flattened, with retail investors bearing the brunt, and institutions have reduced from 22.5% to 17.5%. The Brazilian government estimates that the move could increase taxes by R$10 billion by 2025 and double to $20 billion by 2026, FinanceFeeds reported. At the same time, the bill also requires exchanges and wallet dealers to withhold taxes on pledges and earnings. Economy Minister Fernando Haddad told a press conference: "A flat tax rate broadens the tax base and makes the rules simpler." Details of tax reform and possible impact According to statistics from financial technology company ABCrypto, the new system will make retail investors with nearly ninety percent of their monthly transaction volume below the tax-free threshold face tax payment for the first time; At an annualized rate of return of 15%, net income is likely to decline by more than 10%. In contrast, the tax rate for block traders was reduced from 22.5% to 17.5%, effectively saving 5 percentage points in the tax burden. Affected by the policy news, the trading volume of Brazilian local exchange Mercado Bitcoin on the 14th increased by 27% compared with the previous day, indicating that some investors rushed to settle the position before the old system expired. Crypto consultant Paulo Silva said that "for customers who trade less than 35,000 reais per month, the tax burden jumps from zero to 17.5%, and many people simply stop first". On the other hand, the new law requires virtual asset service providers (VAPs) to directly withhold 17.5% of taxes at source before all pledged interest and liquidity mining are allocated, which may also cause some users to switch to decentralized platforms that are not withheld, or increase compliance risks. Despite the bitterness of small investors, the flat tax rate does bring cryptocurrencies into the mainstream investment framework of Latin America's largest economy. If the subsequent Congress reaffirms the decree, the Brazilian market will officially move towards a new normal of "same tax and same regulation". Related reports Investment institution F Street announced a fixed investment to buy $10 million in Bitcoin: fight inflation, strengthen capital Arthur Hayes: The Bank of Japan "needs to raise interest rates conditionally" or restart QE: Bitcoin, risk assets will skyrocket Micro strategy chokes back "Bitcoin quantum attack", Michael Saylor: Unfounded worry, if it comes true, Google and Microsoft will pour first "Retail investors cry!" Brazil Cancels Cryptocurrency Tax Exemption, Uniformly Levies 17.5% Income Tax" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".