UPDATE 2-Brazil denies tax hike on debt investments

* Brazil finmin Mantega denies report of tax hikes

* Estado said plan aims to discourage Selic-linked investments

BRASILIA Feb 14 (Reuters) - Brazilian Finance Minister Guido Mantega denied a report the government is considering raising taxes on floating-rate debt investments, saying that no tax increases of any kind are planned at this time.

"There is no study for increasing income taxes on financial transactions," Mantega told reporters in Brasilia. "There are no tax increases planned."

Local newspaper O Estado de S. Paulo reported on Tuesday that the government may hike taxes on profits from investments linked to the benchmark Selic overnight lending rate, citing two unnamed government officials it said were familiar with the plans.

The newspaper said the government sought to lower domestic borrowing costs to single-digit levels by taking advantage of a "downward cycle" in the Selic rate to force investors to shun floating-rate instruments. The central bank has cut the Selic four straight times since August to 10.50 percent, in a bid to kickstart a slowing economy.

Taxes on floating-rate debt currently range between 15 percent and 22.5 percent, depending on the maturity of the investment.

Brazil's government has sought to erode investors' appetite for floating-rate debt over much of the past decade, with relative success. Thirty percent of total outstanding government local bonds are pegged to the Selic, down from more than two-thirds less than six years ago.

But companies have been less inclined to issue fixed-rate debt - 89 percent of the 1.5 trillion reais ($875 billion) is still linked to the Selic, according to the newspaper.