BRASILIA, June 25 (Reuters) - Brazil’s federal tax revenues fell in May despite this year’s battery of tax hikes, the country’s tax agency said on Thursday, adding to signs of a recession and complicating government efforts to plug a budget gap.
Brazil’s federal government collected 91.5 billion reais ($29.6 billion) in taxes in May, down 4 percent from the same month a year ago when discounted for inflation.
Economists expected May tax revenues to total 94 billion reais, according to the median forecast in a Reuters poll of 12 economists. The country collected 109 billion reais in federal taxes in April, according to the agency.
Brazilian Finance Minister Joaquim Levy on Tuesday acknowledged that a slowing economy has dragged down tax revenues, but said it was too early to discuss changing the government’s main budget target for this year.
Most economists expect the government to fall short of its primary budget surplus target equivalent to 1.1 percent of the gross domestic product.
The primary surplus, which excludes interest payments, is goal is closely watched by ratings agencies, which have warned of possible credit-rating downgrades.
In the 12 months through April, Brazil posted a primary deficit of 42.615 billion reais or the equivalent of 0.76 percent of GDP — the biggest gap since records began in 2001.
$1 = 3.09 Brazilian reais Reporting by Luciana Otoni; Writing by Silvio Cascione; Editing by W Simon