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Brazil seeks additional US$7.7 bln via tax hikes
Release time:2015-01-21
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The Government of Brazil on Monday announced tax increases on fuel, imports and consumer loans aimed at raising 20.6 billion reais (US$7.7 billion) in additional revenue this year.

The plan is part of an effort to help balance budget accounts and revive investor confidence, Finance Minister Joaquim Levy said at a news conference. The taxes will help the government collect one-third of the savings it needs to meet debt-reduction goals for the year.

“The main goal of these measures is to boost confidence on the economy,” said Mr Levy, who took office at the start of the year. “These measures, taken together, should improve confidence, encourage people to invest in Brazil and take risks.”

The government will restore a fuel tax known as Cide and a PIS/Cofins tax on diesel used to fund Brazil’s social security and state pension systems. Both taxes had previously been eliminated. Their restoration will add respectively 0.22 reais per litre to the price of gasoline and 0.15 reais per litre of diesel.

The Ministry of Finance also increased a tax called IOF, levied on personal loans, to 3 percent from 1.5 percent previously, while increasing a PIS/Cofins social security tax on imports to 11.75 percent.