Brazil registers record revenue, 9.08% growth

The Secretary of Brazil's Federal Revenue Service, Robinson Barreirinhas, announced that tax collection in the first half of the year exceeded expectations, growing by 9.08 percent above inflation compared to the same period last year. In June, revenues increased by 11.02 percent above inflation compared to the previous June.

According to Barreirinhas, the rise in the government's primary deficit forecast to BRL 28.8 billion was largely attributed to the extension of the payroll tax exemption for 17 economic sectors and small municipalities.

“Collections are performing well, but they fall slightly short of covering expenses due to certain exemptions and setbacks,” Barreirinhas said in an interview, explaining the need to freeze BRL 15 billion in the 2024 budget.

Although Finance Minister Fernando Haddad recently estimated the total impact of the exemption at BRL 18 billion for 2024, Barreirinhas maintains that extending the exemption for these sectors will cost the federal government around BRL 25 billion. This total includes BRL 19 billion to BRL 20 billion in benefits to companies and BRL 10.4 billion in aid to municipalities.

Revenue projections

To achieve the zero primary deficit target set by the new fiscal framework, the government needs to secure an additional BRL 168 billion in revenue. The upcoming Bimonthly Revenue and Expenditure Report—the document that guides the execution of the Budget—due to be released this Wednesday (Jul. 24), does not include annual revenue estimates and only presents the projection of raising an additional BRL 87.138 billion in revenue for the second half of the year.