Opinion by: Robin Singh, CEO of Koinly
Crypto can be the first tax lever that governments of governments when they rush for more income, if Brazil’s recent decision is something to pass.
In June, Brazil abandoned its tax exemption for minor cryptocurrency gains and introduced a stable tax of 17.5% on all capital gains in digital assets, regardless of the amount. The decision was part of a broader effort from the Brazilian government to strengthen income thanks to the increase in the taxation of the financial markets.
It is more than a local tax adjustment. A clear scheme emerges when governments find means to extract more tax of the asset class. All over the world, political decision -makers take a new look at crypto as an opportunity for income.
A global model begins to emerge
It was not until 2023 that Portugal caused a 28% tax on crypto gains held for less than a year, a significant change for a country that had long treated crypto as crossed.
The real question is now how long the countries with friendly tax policies can contain the line before following the step, and which will be the next to tighten the screws.
Germany, for example, currently exempts crypto gains in capital gains if the assets are held for more than a year. Even for assets under a year, gains up to 600 euros ($ 686) remain annually.
Meanwhile, the United Kingdom offers a capital allowance of 3,000 pounds ($ 3,976) on all assets, including the crypto, although this amount was reduced by 50% against 6,000 pounds in 2023, reporting possible reductions in the future.
Gray area of the retail investor ending
Although this may seem a small change, the more reduction of the 3,000 -pound threshold could generate significant tax revenues, in particular with recent data from the Financial Conduct Authority (FCA) showing that 12% of British adults now hold crypto.
It is difficult to imagine that it is entirely out of the table, especially since the debt of the British government is increasing.
The era of retail cryptography investors benefiting from a gray zone of firm regulatory leniency. While the cryptography market matures and prices continue to rise, governments point out the titles of the media covering the explosive growth of cryptography.
This is particularly true in emerging markets, where governments undergo increasing pressure to fill budgetary gaps without triggering political reactions from more visible or controversial tax increases.
No other asset corresponds to an average Bitcoin annualized yield of 61.2% in the past five years.
Crypto is an easy target for governments
Fortunately, crypto is a reasonably easy tax objective for governments. It is often considered risky, speculative and perceived as mainly benefiting from the rich. Although it is not as controversial with the public, it also reduces the disadvantages, especially for investors and everyday startups.
In relation: Tax revision of Japan cryptography: what investors should know in 2025
For example, the Brazil structure of 17.5% hit small traders in a disproportionate manner.
Although large institutions can absorb costs or move to courts with more favorable rules, everyday users, including those who use crypto to save in inflation economies, bear the cost.
With the growing chances that other governments will follow the example of Brazil and Portugal, the era of low tax investment or free tax cryptography can end.
The question is not whether the other friendly nations will cryptocurrency will be their grip on cryptographic taxation; It’s how fast and hard.
Opinion of: Robin Singh, CEO of Koinly.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.