BRAZIL’S federal tax revenue in July fell to its lowest for that month in over a decade, official figures showed today, highlighting the strain on government finances which are once again the centre of political and financial market debate.
The tax take totalled 115.99 billion reais (RM86.4 bil) in July, the federal tax service said, down 17.7% in real terms on the same month last year and the lowest take for that month since 2009.
It was slightly less than the 116.5 billion reais forecast in a Reuters poll of economists, and brought the total tax take in the first seven months of the year to 781.96 billion reais, down 15.2% and also the lowest for a January-July period since 2009, the revenue service said.
Brazilian financial markets have wobbled and volatility has shot up in recent weeks, on growing concern that the government will be unable – or unwilling – to rein in next year the record public deficit and debt accrued this year due to the coronavirus pandemic.
Treasury Secretary Bruno Funchal said this week that while the economy is recovering and the government is fully committed to fiscal discipline, the big “unknown” is on the revenue side.
Speaking to reporters remotely after the release, Claudemir Malaquias, head of tax and customs at the revenue service, noted that “macroeconomic variables” and the reduced IOF financial transaction tax rate to zero contributed to the figures.
Brazil’s currency fell sharply and market-based interest rates and spreads spiked higher today on growing investor fears that the government’s fiscal position is deteriorating rapidly. – Aug 21, 2020, Reuters
