Brazil to raise tax on net income of banks, financial firms

div classBodysc17zpet90 cdBBJodivpSAO PAULO Reuters – Brazils government will increase taxes on banks and financial institutions on Thursday, the official gazette showed, in a bid to fund a new debt renegotiation program for small firms.p

pThe levy will be imposed from Aug 1 to Dec 31, under an executive order signed by President Jair Bolsonaro and Economy Minister Paulo Guedes, which has yet to be approved by Congress.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe CSLL tax, which is levied on banks net income, will be increased to 21 from 20, while the tax on nonbanking financial institutions will be raised to 16 from 15.p

pThe government said it expects to raise an additional 244.1 million reais 49.4 million with the move.p

pReuters had reported late last month, citing three sources at the Economy Ministry, that the government was studying an increase to the CSLL to fund the Congressapproved program to refinance microenterprise debts.p

pTo finance the program, which has an estimated cost of around 500 million reais, President Jair Bolsonaro also signed a decree to cut tax benefits from soda syrups produced in the Manaus Free Trade Zone, in the state of Amazonas.p

pThe decree, which is effective immediately and does not need to be approved by Congress, will increase revenue by around 250 million reais this year, the government said in a statement.p

p1 4.9385 reais