Brazil Breaks Tax Record
January 24, 2013 Taxation in Brazil
BRASILIA – Despite seeing record breaking tax revenues, the government of Brazil is still not meeting its fiscal targets.
The Brazilian Tax Authority announced on January 23rd that the country has seen its highest level of tax revenues ever, but despite the good news, the government has not met its own tax revenue targets for the 2012 year.
The total tax revenues for the 2012 calendar year reached BRL 1.029 trillion, which is a 6.1 percent increase compared to 2011.
However, due to the country’s escalating inflation levels, the increase is only equivalent to a 0.7 percent rise in revenues when inflation is taken into account.
it is currently estimated that the inflation level in Brazil has now reached 6 percent.
Both the real increase and the inflation adjusted increase are far below the government’s target for the year, due to several government enacted tax breaks which sapped approximately BRL 40 billion for the country’s coffers.
The government is now considering the feasibility and repercussions of easing its own revenue targets without causing misbalances in the national economy or send inflation levels spiralling even further upward.
Photo by ulisses barbosa