In the face of falling revenues, Brazil’s governing coalition are looking to implement a new tax on financial transactions.
Facing a financial situation not dissimilar to governments worldwide, Brazil’s leading coalition in Congress will attempt to instate a new financial transaction tax, to offset its own falling revenues and increased spending. The government will attempt to push through a bill which will see a 0.1% tax implemented on all financial transactions. The tax, if accepted, will see an extra BRL12 billion in the Government’s coffers per year. The extra money is intended to finance Brazil’s healthcare system. Speaking about the proposed introduction, Henrique Fontana, head of the governing coalition in the Chamber of Deputies, said “Tax revenues fell and health expenditures grew, the only feasible solution is modest tax.”
The currently proposed financial transaction tax bill was introduced in 2007, but was eventually dropped after facing significant stall tactics from opposition parties. Brazil had previously seen a financial transaction bill, it was introduced and accepted in 1993 and expired at the end of 2007, it was levied at 0.38% and raised approximately US$20 billion annually.
It is expected that the proposal for the tax will be voted upon in September of 2009. The financial transaction tax is not expected to pass through government with ease. There is widespread opposition to the introduction of new taxes from coalition opposition parties
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