The market closing program on Monday interviews the founder and CEO of one of the most successful economic stories in recent Brazilian history. We're going to talk to David Velez, who is the founder of Nubank. David, thank you so much for speaking with us here at CNN Money. Well, Nubank obviously has a brilliant history of success and efforts in bringing banking services to the public, but there's no escaping the hot news. And in recent days, in recent weeks, Nubank has been involved in quite a controversy related to taxation, to how much the institution pays, since the government, Brasília, has been discussing this issue very frequently in recent days. Why is there a distinct perception of Nubank versus outside entities, and regarding the tax burden of a fintech company?
Hey Fernando, well, first of all, thank you for the invitation. First, I want to make it very clear, because there's been quite a lot of noise about this topic in recent weeks, that as a company, our obsession is our consumer, not our competitor, and we're not going to be defending ourselves against the many attacks that have been flying back and forth in recent weeks from many competitors. We have great respect for Brazilian banks, and we, especially as a company, have been working for 12 years to bring more competition to this financial system, including over 110 million people in the Brazilian financial system and bringing a great deal of value to Brazilian society. So, our general view is not to get into these debates, but when there are these kinds of accusations that are clearly untrue, we have to step out and make that very clear. And in the specific case of taxes, as I made very clear in a post I made on LinkedIn, or in the Bank in 2025 financial situation, the most tax I pay in Brazil is R$ 8.2 billion with an effective rate of 32%, compared to the average for banks of 12%. In this debate, what matters is what the institutions are actually paying, not what they should be paying. What we're actually paying is 32%, but that's extremely high. I don't think there's any other case in Brazilian history where a startup that's only 12 years old has paid more than R$ 8 billion in taxes. So, we felt that even though we don't want to get into this fight, these discussions, it was important to make it very clear that fintech companies, including Nubank, are actively contributing to Brazil and paying a very high rate in terms of taxes.
So David, given these figures you've presented, wouldn't the discussion in Brasília about a potential increase in the tax levied on fintechs affect Nubank or further increase the tax burden you're reporting?
Well, I think that would increase the burden even further, because I think the debate now is about whether this rate is nominal for CSL. Fintech companies are paying the finance companies; one finance company is paying 15%, and the banks are paying 20%. So I think the traditional debate should be the same, but again, the point isn't necessarily the nominal rate, it's the effective rate. And fintech companies, including those in the banking sector, don't have a decades-long track record of operating in Brazil that would allow them to deduct a lot of taxes. That's precisely what allows banks to go from a nominal rate of 40-45% to 12%, right? Because there are a great many ways to lower that effective interest rate. So we don't think the problem lies with fintech companies paying more taxes. We're actually paying much more than what many large financial institutions charge. Well, again, our rate is 33%, compared to the average effective rate of the major banks of 12%. I think the government's focus, if it wants to increase tax collection, should be on the effective tax rate. The truth is that everyone is paying, and the effective rate is far from the nominal rate. Our proposal was to have a minimum effective nominal rate of 7.5% for all financial institutions. So, everyone pays a minimum. There is a minimum that that institution will pay. And in this way, it really is a fair rate that inhibits this large number of ways to pay less taxes.
Perfect. Just to wrap up this issue, we have many other topics to discuss here, David. One of the ways that financial institutions in Brazil have historically paid less tax is, for example, by making provisions for doubtful debts, thus reducing profits, or eventually by acquiring financial institutions with tax credits. Nubank has been questioned about having a banking license in Brazil. Can you imagine buying a bank with a banking license and thus solving two problems at the same time? Obtaining tax credits and a banking license?
I think it's possible, right? This new Central Bank resolution requires any institution with 'bank' in its name to be a bank. We have a history of respecting all regulations 100%. So we announced that we're going to be looking for a banking license. This search can be done through acquisition or by requesting a license from scratch. And of course, there are some banking licenses that can offer this type of possibility. I imagine they will probably be smaller licenses. That's something we'll certainly consider in order to meet this demand from the Central Bank.
Nubank has also applied for a banking license in the United States in recent years. The international front has been a very important area in the company's business plan. I wanted to hear from you about how far Nubank wants to go in the United States, as well as in Mexico and Colombia, the other countries where you've already established a presence.
