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Brazil May Hike Personal Income Taxes

by Mike Godfrey, Tax-News.com, Washington

10 September 2015


Brazil is considering an increase to the personal income tax burden to balance the budget, Finance Minister Joaquim Levy has said.

Speaking to reporters following a meeting with the Organisation for Economic Cooperation and Development (OECD) on September 8, 2015, Levy said that an increase in the income tax is one option under discussion. He noted that Brazil has a lower individual income tax burden than most OECD countries.

At the end of last month, the Finance Minister said in an official statement that the Government plans to increase revenue by BRL11.2bn (USD3bn) through a fiscal adjustment in 2016.

The CSLL social contribution tax on financial institutions was hiked from 15 percent to 20 percent on September 1, 2015. This is expected to provide the Government with additional revenues worth about BRL747m this year and about BRL3.8bn next year.

The Government also decided to reinstate the IOF financial transaction tax on loans from the state development bank BNDES.

The country is expected to run a central government primary deficit (the deficit less debt interest costs) of BRL30.5bn, or 0.5 percent of gross domestic product (GDP), next year.

TAGS: individuals | Finance | tax | economics | interest | fiscal policy | gross domestic product (GDP) | budget | tax rates | Brazil | tax reform | individual income tax

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