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Brazil Plans to Tax Airbnb Rentals Ahead of Olympics

  • Reuters

General view of the Olympic Stadium, undergoing renovation to stage athletic competitions during the Rio 2016 Olympic Games, in Rio de Janeiro, Brazil, Nov. 9, 2015.

General view of the Olympic Stadium, undergoing renovation to stage athletic competitions during the Rio 2016 Olympic Games, in Rio de Janeiro, Brazil, Nov. 9, 2015.

Brazil is planning to tax homeowners who rent out properties or rooms on the online home-rental marketplace Airbnb ahead of the 2016 Olympic Games in Rio de Janeiro, a tourism official said on Monday.

The head of the tourism agency Embratur, Vinícius Lummertz, has talked with Airbnb and hotel industry executives and has drawn up a proposal to levy a tax on registered renters, one of his aides said.

The type of tax, its size and whether it would be collected by the federal government or state governments have yet to be worked out, said Lummertz's aide Jose Gayoso.

"It will be a fair tax that will not be passed on to consumers or ruin the business," he said by telephone.

Brazil has raised a series of taxes this year as it scrambles to plug a gaping fiscal deficit that is undermining confidence in its once-booming economy.

Brazil's hotel industry has complained that Airbnb is robbing it of business at a time of severe recession, and hotel owners, who are already subject to room taxes, will welcome the move as an effort to level the playing field.

Gayoso said Airbnb was open to taxation because it wants to have a more solid position in the Brazilian economy as demand for its unregulated services soars during next year's Olympics, Gayoso said.

Airbnb, one of Silicon Valley's most successful start-ups, has an official contract to provide at least 20,000 rooms during the Olympic Games.

Gayoso said Airbnb helped Brazil solve an accommodation deficit during a previous mega-event, the 2014 World Cup, which brought more soccer fans to Brazil than its hotel industry could handle.

Currently, Airbnb is collecting and remitting taxes in a dozen cities in the United States, including a hefty 14 percent added to online reservation in San Francisco and Washington D.C.

Paris and Amsterdam also obliged Airbnb to levy taxes.

In Brazil, the proposed tax would have to go before Congress which must approve any changes in taxation.

The proposal to tax Airbnb follows an angry dispute between Brazilian taxi drivers and the online ride-sharing service Uber that led several cities, including Rio de Janeiro and Sao Paulo, to move towards banning the unregulated business.

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