Revenue likely to close 2015 with 3.6% drop
Brazil's revenue should close out the year with a reduction of approximately 3.6% (inflation considered). Claudemir Malaquias, head of the Center for Tax Studies at the Federal Revenue Service, said Wednesday (Dec. 23) that the extra efforts made by the government to collect overdue taxes should slow down the pace of reduction by the end of the year.
Up to November, the country's tax authority forecast a 4.5% decline in 2015's revenue. Malaquias said the prediction was revised and that the slip will be close to the 3.6% slide in the GDP, released by the Central Bank's Report on Inflation.
“In 2015, we collected a significant amount in overdue taxes through law enforcement measures. We're making an effort to mitigate the revenue reduction resulting from economic activity. Since we've had a positive December [for collecting debts] from our point of view, I believe the revenue will close out the year with a real reduction very close to that of the GDP,” Malaquias said.
From January to November, tax collection reached $277.5 billion, down 5.76% from the same period in 2014. Of that amount, $3.30 billion come from extraordinary revenues. According to Malaquias, extraordinary revenues are expected to close out December at some $3.65 billion due to the new debts collected this month. They have mitigated the impact of the economic crisis on the revenue.
Malaquias was not willing to make projections on next year's tax collection. He says revenues will close out 2016 with another decline, but the plunge may be made less sharp if the economy starts recovering in the first half. “The Brazilian economy has potential to recover quickly. The question is when we'll reverse the expectations of consumers as well as the productive sector,” he argued.
Another factor which may mitigate the decline in revenue collection in 2016, Malaquias pointed out, is the implementation of tax raising measures. He mentioned the halving of payroll tax breaks, which should increase $2.52 billion next year, and the rise in the tax on hot beverages, along with the withdrawal of tax incentives on tablets and smartphones.
Translated by Fabrício Ferreira
Fonte: Revenue likely to close 2015 with 3.6% drop
