Deputies approve to raise taxes on bank profits
By a wide margin, the Chamber of Deputies approved on Thursday (Sep. 3) the provisional measure that raises the rate of contribution from 15% to 20% of net income from financial institutions.
By a wide margin, the Chamber of Deputies approved on Thursday (Sep. 3) the provisional measure that raises the tax rate for financial institutions from 15% to 20% of their net income. The new rate will apply to banks, insurance companies, and credit card administrators, while credit unions rate will be raised to 17%. Disagreements on the issue between the opposition and the governing coalition marked the voting. The measure is part of the package of fiscal adjustment proposed by the Finance and Planning Ministries.
According to the government accounts, raising taxes in the financial sector would produce $238 million in revenue this year. In 2016, the amount would surpass $795 million, and, in 2017, it would reach $1 billion.
The opposition lawmakers said it is "naive" not to consider that the increase will reflect on customers. For Mendonça Filho, leader of the Democrats' Party in the Chamber of Deputies, the ones who will pay the bill are the workers, the middle class people, the productive sector. Congresswoman Jandira Feghali (from Rio de Janeiro), leader of the Brazilian Communist Party fired back: "Considering this argument, we have to abolish the tax on people's income too, because any tax is shifted to the consumer. It's a good mask used by parties that protect bank income." The congresswoman noted that the measure should be taken for a longer term than it has been established, had the amendment presented in the committee been accepted.
The approved text limits the increase of the rate to a period of three years. The increase would come into effect on September 1st, 2015 to December 31st, 2018, when the rate will have to go down to the 15% margin. The restriction of the increase to a limited period was advocated by the Brazilian Federation of Banks (Febraban). Febraban's president, Murilo Portugal Filho, warned that the measure could make it more expensive and more difficult to obtain credit.
Translated by Amarílis Anchieta
Fonte: Deputies approve to raise taxes on bank profits
