Brazil studies raising taxes without lawmaker approval, sources say

By Bernardo Caram

BRASILIA (Reuters) – Brazil’s government is considering tax hikes that do not require congressional approval to balance this year’s budget, two finance ministry sources said on Friday, after officials acknowledged that new revenue measures could be implemented.

Taxes in this category could include a levy on financial transactions (IOF), and import and export taxes, which can all be adjusted via presidential decree.

On Thursday, the Treasury unveiled a plan for new revenue measures, if necessary, to ensure compliance with the year’s fiscal target of eliminating the primary deficit.

The fresh measures could be included in the bimonthly revenue and expenditure report due later this month, the Treasury said.

In July, the government froze 15 billion reais ($2.68 billion) in federal expenditures to meet the fiscal goal. The new assessment of federal accounts will be presented on Sept. 20.

To finalize its analysis, the Finance Ministry is waiting for approval of a bill that includes compensatory measures for costly payroll tax waivers passed by Congress.

These measures include securing resources from judicial deposits, collecting dormant bank account funds and repatriating overseas assets.

One of the sources noted that even with the approval of these measures, the implementation process will not be straightforward, requiring the issuance of new regulations and programs.

($1 = 5.5988 reais)