Brazil’s federal revenue up 10.46% to BRL 202.98 bi in May

Federal tax and other revenue collection in Brazil hit a record high for the month of May, reaching BRL 202.98 billion, as per data released Tuesday (Jun. 25) by the Federal Revenue Service. The result represents a real increase (i.e. discounting inflation) of 10.46 percent, in values adjusted by price index IPCA, compared to May 2023.

This is the highest figure for May since 1995, when the current time series began. It is also the best collection performance for January through May 2024. In the period, revenue reached BRL 1.09 trillion, a net increase (inflation for the period discounted) of 8.72 percent.

Improving revenue in May was an extra collection of BRL 820 million in Withholding Income Tax (IRRF) – Capital Income, stemming from the taxation of exclusive funds—which did not occur in the same month in 2023. The law that changes the income tax levied on closed investment funds and on income earned abroad through offshore companies was passed in December last year.

Rio Grande do Sul

Claudemir Malaquias, head of the Center for Tax and Customs Studies at the Federal Revenue Service, explained there was an estimated loss of BRL 4.4 billion in revenue in May due to the calamity in Rio Grande do Sul. The state is facing the worst climate disaster in its history and has been working to recover structures after floods impacted families and businesses in April and May.

“A portion of these taxes may be recovered after the deferral period ends, but another portion will certainly not come due to the interruption or the actual loss of revenue resulting from the activity that was obstructed by the effect [of the floods],” said Claudemir Malaquias.