An economic team led by Brazilian Finance Minister Henrique Meirelles forwarded a plan that would see 14 billion Brazilian reais in tax increases coupled with a 30 billion reais spending freeze in an effort to meet Brazil's fiscal deficit target, Reuters reported March 27, citing an unidentified official.
The government under President Michel Temer will raise the federal PIS and Cofins social security taxes, which were proposed toward the end of 2016, and might decide to raise the IOF tax on financial transactions and CIDE tax on fuel.
However, Temer is purportedly opposed to most of the tax increases, on concerns that higher taxes may negatively affect the economy in light of its recent recession. A formal announcement on the measures could come out on March 28 or 29, Meirelles reportedly said.
The government is also expecting to sell off hydroelectric plants and cancel old debts, which should bring in additional revenue of 17 billion reais, the newswire added.
As of March 27, US$1 was equivalent to 3.13 Brazilian reais.