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Brazil lawmakers approve amnesty program to raise revenues

Brazil lawmakers approve amnesty program to raise revenues

BRASÍLIA: Brazil’s Lower House of Congress on Wednesday approved a bill that reopens a program providing an amnesty against criminal prosecution to Brazilians holding undeclared assets abroad if they pay tax and a fine.

In a 303 to 124 vote, lawmakers approved legislation that is expected to yield 13.2 billion reais ($4.32 billion) in extra revenues this year. The bill, which was changed by the lower house, will return to the Senate for final approval.

The extra cash would help ease the financial strains of many states struggling to pay wages and public services while also improving the fiscal position of the federal government, which has posted three straight years of hefty budget deficits.

A group of governors met in Brasilia earlier on Wednesday to call for their allies in Congress to support the legislation, whose proceeds would be shared between the federal government and states and municipalities.

To avoid any legal challenges over the constitutionality of the tax rate, lawmakers raised the fine to 20.25 percent from 17.50 percent, of the undeclared assets, while lowering the tax percentage to 15 percent from 17.5 percent.

“Most states and municipalities are under heavy financial stress and need this money now,” said Alexandre Baldy, the congressman in charge of reviewing the legislation.

Lawmakers continued to debate a controversial provision in the bill that allows relatives of elected politicians to participate in the amnesty program.