Brazil’s government is considering tax increases that can be enacted without congressional approval to address this year’s budget deficit, according to two reports from the finance ministry received on 6 September 2024.
Officials have indicated that new revenue measures may soon be implemented. The revenues will be raised through new taxes imposed on financial transactions and import/export taxes.
On 5 September 2024, Brazil’s Treasury announced potential new revenue measures to meet the fiscal target of eliminating the primary deficit. Official data revealed a primary budget deficit of BRL 9.283 billion (USD 1.66 billion) in July, exceeding economist expectations of BRL 8.8 billion, despite a strong increase in public revenues.
The Treasury announced that new measures may be incorporated into the bimonthly revenue and expenditure report scheduled for release later this month. In July, the government froze BRL 15 billion reais ( approx. USD 2.68 billion) in federal spending to achieve its fiscal goals.
In August, Brazil’s Finance Minister Fernando Haddad unveiled plans to raise levies on interest on equity and the social contribution on profits (CSLL). This included plans to raise revenue through increased income taxes, mainly targeting banks with a significant tax rate hike.
The finance ministry also announced that it plans to present proposals to Congress to tax big tech companies and implement a global minimum tax of 15% for multinational corporations on 2 September 2024.
These new tax measures will be enforced if Brazil’s government fails to achieve its fiscal goal for 2025 due to a revenue shortfall.
