Brazil will need to revisit discussions about requiring financial technology companies to report transaction values to the tax revenue service, according to the agency's director.
During a Senate hearing, Robinson Barreirinhas raised concerns about lesser-known payment institutions being used for money laundering, emphasizing the need for increased oversight on fintechs.
Barreirinhas mentioned that the tax revenue service possesses intelligence capabilities to track transactions, which the government plans to extend to fintechs, despite suspending similar measures last year after public opposition.
While acknowledging the valuable role of fintechs, Barreirinhas emphasized that many are exploited for illicit activities due to lax account opening procedures, suggesting the necessity for stricter controls.
In September, Brazil's tax revenue service mandated that fintechs report transactions, including those conducted through the popular Pix instant payment system, bringing them in line with banks. This move stirred controversy, with critics accusing the government of unfairly burdening workers and triggering a suspension in January due to declining public support.
Barreirinhas expressed concerns about the potential financing of organized crime in Brazil through various means, including smuggled goods, cryptocurrencies, and online gambling.