Federal tax revenue hits six-year low for July

The economic downturn continues to impact the government's coffers. Federal tax revenue totaled $33.290 billion in July, down 5.8% compared to the same month last year, adjusted for inflation gauged by the Broad National Consumer Price Index (IPCA). According to the Federal Revenue Service, this has been the lowest result for the month since 2010.

The government revenue has also continued to fall in the cumulative year-to-date result. Between January and July, government revenues totaled $224.586 billion, down 7.11% compared to the same months of 2015 (adjusted for inflation). This was also the lowest figure for the period since 2010.

July was the 16th consecutive month to see year-over-year declines in tax revenue (adjusted for inflation). According to the Federal Revenue Service, the 9.64% decline in industrial production, the 9.61% decrease in goods sales, and the 3.47% increase in the total wage bill (below cumulative inflation) were the main factors causing loss of federal revenue this year.

But the government revenue could have shrunk even further in 2016 if some exemptions granted in recent years had not been rolled back. Between January and July, the government collected $16.376 billion less due to tax cuts. In the same period of 2015, the tax break had totaled $19.701 billion.

The most impacting exemption was on payroll, which narrowed tax revenues by $2.626 billion in the first seven months of the year.

Translated by Mayra Borges