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Brazil tax collection fall 1.79% as $460 billion, lowest since 2009

Brazil tax collection fall 1.79% as $460 billion, lowest since 2009

BRASILIA:  Tax revenue gained by government through taxation fell to 1.79% last year and totals US$460 billion according to Brazil’s Secretariat of the Federal Revenue.

With inflation correction, this figure was of US$472 billion.

It is the first time that the government registers a fall in its revenue since 2009, the peak of the financial crisis, when there was an economic downturn that meant a decrease of 2.66% in tax revenue figures.

“The economic behavior reflected directly on tax collection”, the head of the Center for Research on Tax and Customs, Claudemir Malaquias, said.

The result was worse than that expected by government, which had already warned about a possible decrease in collection, considering the low rhythm of economic activity and tax relief to the private sector.

Government tax breaks last year surpassed by US$9.84 billion the figure for 2013, totaling US$40.3 billion. Only with payroll tax relief, the government did not collect U$8.37 billion.

Even with this push, industry ended the year in crisis, firing staff and with no new investments. According to the Federal Revenue of Brazil, industrial production slowed down by 3.15% in 2014.

Trade also has gone through difficulties. The sale of goods and services dropped to 1.21%. Without an increase to tax relief, the government would have increased its revenue in 2014.