Brazil reconsiders small order import tax as fiscal pressures mount

Brazil’s government is discussing with lawmakers the possibility of re-imposing unpopular taxes on imports worth up to $50, as it struggles to balance the budget, two sources said.

President Luiz Inacio Lula da Silva’s government had announced the end of the $50 tax exemption in April in its effort to boost revenues, but a few days later reversed the decision following a public outcry.

A Finance Ministry source told Reuters the re-imposition of the tax “is on the radar to some extent,” but that the government is still trying to garner support for an alternative measure proposed last month.

Lula’s government in December introduced a measure to replace an earlier bill approved by Congress that gave fiscal waivers to companies and municipalities totalling around 27 billion reais ($5.58 billion).

Lawmakers rejected the bill, prompting tough negotiations between the government and Congress on how to proceed.

The approved tax waivers are costly, and the re-imposed import duty would not be enough to offset their cost, one of the sources said.

The sources asked not to be named because they were not authorised to speak on the issue.

Source: Nasdaq

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