The initiative seeks to balance public accounts without resorting to unpopular measures, such as the increase in IOF, through a gradual adjustment of tax benefits.
The Brazil Government will support a bill that proposes to reduce in 10% federal tax exemptions in the next two yearswith the aim of strengthening collection without resorting to the controversial increase in financial transactions tax (IOF) announced recently.
The initiative, promoted by Deputy Mauro Benevides, establishes a 5% cut in 2025 and another 5% in 2026 on the value of the tax benefits in force. It also extends to credit and tax incentives, expressly excluding the Free Zone of Manaos and the non -profit entities.
The expected income
According to official sources, the measure could generate additional income for 40,000 million reais (around 7,160 million dollars) this year and a similar amount in 2026, which would allow the Executive to avoid the increase in IOF that had generated resistance both in Congress and in sectors of the financial market. This was confirmed to Reuters Two sources with direct knowledge of the matter.
Central Brazil Robo.jpg Bank
The proposal arises after the discomfort generated by a recent decree of the Government that raised the IOF on credit, change and private pensions. The rejection was such that several legislators initiated efforts to repeal the norm.
The Minister of Finance, Fernando Haddad, anticipated that the Executive will present next week a new package of fiscal measures to clean up public accounts. Its approval would be key to leaving without effect the rise of transactions tax, at the same time preserving the fiscal consolidation objectives.
Source: Ambito
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