Brazil gov't rules out tax raise in 2016

Brazil's Finance Minister Henrique Meirelles dismissed the possibility of a tax raise this year and said that all predictions in the budgets are in line with the tax collection predicted.

“At this moment, there's the need for an increase in the total amount collected, and we believe that part of it should come back as the gross domestic product resumes its growth—not to mention the revenues with privatizations and concessions,” the minister said.

Meirelles, who attended a business award ceremony in São Paulo, said that the country's current priority is to bring the economic downfall under control, provide it with stability, resume growth, invest, and generate employment. “To meet these goals, we are working to take the government from its position of absorbing society's savings, by curbing public spending. That should make more resources available for funding, credit, and investment.”

The goal is to provide Brazil with the conditions to grow sustainably for years to come, the minister argued. “Results are positive as it is, expectations towards the economy are improving in every sector, and the confidence rate is getting better. That can already be seen reflected in the resumption of the activities in certain sectors—some of which have managed to increase, whereas others are seeing a less significant fall. In due time, we'll have employment creation back, and as a result the country may consistently increase its income standards.”

Meirelles said the drop in tax collection announced Thursday reflects a historic trend. “What we're looking at now is the result of this severe recession Brazil entered late in 2014. We're facing the country's biggest recession in history, which stems from the economic policy of recent years. As we manage to correct it, activity becomes stable and starts showing results,” he explained.

Translated by Fabrício Ferreira