Economy

Federal revenue totals BRL 1.87 trillion and breaks record in 2021

Economic recovery and tax on profits ensure growth

Wellton Máximo

Published on 26/01/2022 - 11:35

Agência Brasil Brasília

Dinheiro, Real Moeda brasileira
Foto:José Cruz/Agência Brasil/Arquivo — © José Cruz/Agência Brasil/Arquivo

The recovery of the Brazilian economy and taxes on profits and income ensured a record collection in 2021. According to figures released by the Federal Revenue Office, Brazil’s federal government collected BRL 1.879 trillion ($ 342 billion dollars) last year, a growth of 17.36 percent compared to 2020, deducted official inflation calculated by the National Broad Consumer Price Index (IPCA).

After slowing down in November, the tax collection grew in December, totaling BRL 193.902 billion ($ 35.2 billion) in the month. This represents an increase of 10.76 percent compared to December 2020, also deducting inflation. The sum is a record for the month and was influenced by economic growth and the increase in the Tax on Financial Operations (IOF) rate, in force since October.

Last year, the extraordinary collection of BRL 40 billion ($ 7.2 billion dollars) in Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) in 2021 boosted revenues. This occurred because companies had higher profits than expected last year and had to pay extra taxes on the adjustment returns.

According to Federal Revenue Office’s new special secretary Julio Cesar Vieira Gomes, the result of 2021 should be celebrated, because economy is still under the effect of the COVID-19 pandemic. He said that preliminary data for January indicate the continuity of the recovery in 2022.

“The increase in collection in 2021 was very expressive. There's a lot to celebrate considering we're still amidst a pandemic. We had a significant increase in taxes on corporate profits and income, and also in the income tax of individuals”, declared Gomes.

Another factor that explained the increase in revenue in 2021 was the decrease in deferrals of tax payments registered in 2020. This reinforced the government's cash by BRL 19.7 billion ($ 3.5 billion dollars) in 2021. The increase in IOF rates, which financed social program Brazil Aid at the end of last year, contributed BRL 2.13 billion ($ 388 million dollars).