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UPDATE 1-Brazil tax revenue rises in Sept as economy rebound boosts corporate taxes

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BRASILIA, Oct 21 (Reuters) - Brazil’s federal tax revenue rose to 119.8 billion reais ($21.4 billion) in September, the revenue service said on Wednesday, marking the second consecutive increase from a year ago as the recovering economy boosted corporate taxes and contributions.

That was the highest September total for six years and up 2% on the same month a year ago, the agency said. It was also slightly more than the 118.5 billion reais forecast in a Reuters poll of economists.

The total federal tax take in the first nine months of the year was 1.03 trillion reais, the tax agency said, down 11.7% from the same period last year and a reflection of how hard the COVID-19 pandemic hit economic activity.

Claudemir Malaquias, the agency’s head of tax and customs, told reporters in an online press conference that he was optimistic for the outlook through the end of the year.

“It’s impossible to say when we will get back to pre-crisis levels, but we are on course to get there soon,” Malaquias said, citing the economy’s continued recovery, notably in retail, consumption and industry.

“We see economic activity heating up, and companies are in a better financial state than they were in previous months. Another positive sign is from industry. Orders are rising, which means wholesalers and retailers are ordering,” he said.

Corporate taxes and contributions rose 25% on the year to 18.73 billion reais in September, while personal income taxes also rose just over 25% to 3.6 billion reais.

On the other hand, there was a 75.8% plunge in revenue from the ‘IOF’ tax on credit card transactions, after that levy was eliminated earlier this year as a temporary measure to tackle the coronavirus crisis.

Malaquias said there are no plans to extend that into next year.

$1 = 5.60 reais Reporting by Jamie McGeever Additional reporting by Marcela Ayres Editing by Chris Reese and Marguerita Choy

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