Brazil tax change aimed at boosting local production Mantega

BRASILIA Wed Dec 5, 2012 7:54am EST

BRASILIA Dec 5 (Reuters) - A narrowing in the scope of a financial transactions tax (IOF) is aimed at allowing local companies to apply more funds to boost production, Brazil's Finance Minister Guido Mantega said on Wednesday.

Brazil's government said only foreign corporate loans of up to one year will keep paying the so-called IOF tax, which remains unchanged at 6 percent, according to a presidential decree published in the official gazette on Wednesday.

Mantega added that Brazil's currency is floating, and that the government does not maintain a target for the exchange rate.