Brazil's tax collection falls for 11th consecutive time

13:37, October 21, 2009      

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Brazil's tax collection registered an 11.29 percent decrease in September from the same period a year ago, totaling 51.52 billion reais (29.44 billion U.S. dollars), the country's Federal Revenue Secretariat said Tuesday.

It was the 11th consecutive drop in tax collection, compared with the same period in 2008. Compared to August 2009, the tax collection registered a fall of 1.29 percent.

In the first nine months of this year, tax collection totaled 481.62 billion reais (275.21 billion dollars), down 5.95 percent from the same period in 2008.

According to Secretariat data, the decrease in tax revenue can be attributed to such factors as a fall in industrial activity and in company profit, both caused by the international financial crisis.

Additionally, there was an increase in the default levels in the country, which cost the country 4.7 billion reais (2.68 billion dollars) in taxes in 2009.

Several tax cuts made by the government this year also took their toll on the economy, costing Brazil 19.5 billion reais (11.14 billion dollars) so far.

The revenue of the Industrialized Products Tax (IPI) fell 30.56percent in the period, totaling 2.65 billion reais (1.51 billion dollars).

At the beginning of this year, the Brazilian government cut the IPI for the automotive sector, construction supplies and manufacturing of some household appliances like ovens and refrigerators.

Although the tax-cut did boost consumption, it caused a drop in tax collection.

Source:Xinhua
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