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Brazil considers reinstating tax on financial transactions -media
August 27, 2015 / 11:47 AM / in 2 years

Brazil considers reinstating tax on financial transactions -media

SAO PAULO, Aug 27 (Reuters) - The Brazilian government is considering reviving a financial transaction tax known as the CPMF to try to narrow a large fiscal gap in 2016, three leading newspapers reported on Thursday.

A plan to recreate the CPMF is part of the budget proposal for 2016 that is being discussed by President Dilma Rousseff and her economic team, papers Valor Economico, O Estado de S.Paulo and O Globo said.

The finance ministry did not immediately respond to an email seeking comment.

The last CPMF consisted of a 0.38 percent charge imposed on nearly every financial transaction in Brazil. It was eliminated in 2008 in a major defeat for then-President Luiz Inacio Lula da Silva, and subsequent attempts at reinstating it have failed.

This time, the government considers sharing part of the CPMF proceeds with states and municipalities to reduce resistance to the tax in Congress, O Globo said.

Faced with what is expected to be the worst recession in 25 years, the Brazilian government has been forced to lower its fiscal savings goals because of a sharp plunge in tax revenue.

Bringing back the CPMF would be part of a strategy that includes planned asset sales and spending cuts to achieve a primary surplus target of 0.7 percent of GDP in 2016. (Reporting by Walter Brandimarte; Editing by Lisa Von Ahn)

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