BRASILIA: The Brazilian Congress approved a measure that will increase business tax contributions between 1 percent and 3 percent. The Brazilian Federal congress approved a legislative measure Thursday that will increase tax contributions of companies in 56 industries by between 1 and 3 percent.
The government led-initiative had initially aimed to increase business contributions by between 2.5 to 4.5 percent, but was modified after successful lobbying efforts to eliminate planned tax increases on agricultural and textile goods. The bill, which passed on a 253-144 vote, is projected to increase the government tax revenue by US$3.2 billion per year.
“I believe it was a valuable political contribution. More than just a victory, it is an important signal for the country. And the substance of the bill was preserved,” leader of the ruling Workers Party (PT) in the chamber, Jose Guimarães stated. The latest tax revenue figures for Brazil declined by 4 percent in the first quarter of 2015.
In efforts to increase tax revenues, the Brazilian government approved a similar measure last May increasing the income tax rate on the country’s banking sector from 15 to 20 percent, which is expected to generate an additional USD1.3 billion in revenue annually. Brazilian Finance Minister Joaquim Levy acknowledged Tuesday that a slowing economy has dragged down tax revenues. Currently, Brazil has one of the highest rates of taxation in Latin America.
