UPDATE 2-Brazil hikes corporate taxes to meet elusive fiscal goal
Thu Apr 2, 2015 12:33pm EDT
Related: Bonds, Markets
UPDATE 2-Brazil hikes corporate taxes to meet elusive fiscal goal
By Alonso Soto and Luciana Otoni
(Reuters) - Brazil will increase taxes on the financial income of thousands of companies, raising an estimated extra 2.7 billion reais ($857 million) in federal revenue this year as the government scrambles to meet its fiscal goal and regain investors' confidence.
The Cofins tax rate on applicable revenue will rise to 4 percent and the PIS/Pasep tax rate will rise to 0.65 percent, the country's tax agency said on Thursday. Both tax rates, which help fund the country's social security system, were reduced to zero a decade ago.
The agency said that the new tax rates will be charged to about 80,000 companies in a bid "to avoid giving up important resources for social security." The tax increase, which takes effect on July 1, will not be charged on financial institutions, the agency said.
After years of heavy spending and tax breaks that have threatened Brazil's investment grade rating, President Dilma Rousseff started her second term in January by cutting expenditures and raising taxes on everything from fuel to cosmetics.
More:
http://www.reuters.com/article/2015/04/02/brazil-economy-taxation-idUSL2N0WZ0MH20150402?rpc=401
