Brazil’s financial package to include a higher tax on shares

Brazilia (Reuters) -Minister of Finance in Brazil Fernando Haddad on Tuesday that the new financial package of the government includes an increase in the income tax rate imposed on the so -called benefits on stock payments (JCP) by 20 % of 15 %.

JCP is a form of rewards for shareholders that allows companies to deduct such payments from the corporate tax base.

Speaking to reporters, Haddad said that the decision to include this measure – which was previously proposed by the government but was not voted by Congress – came at the request of the legislators.

Haddad also confirmed that the financial package includes unifying income tax rates on financial investments by 17.5 %, to replace the current sliding range of 15 % to 22.5 %, which varies according to the period of retaining investment.

The new average will be applied to all investments, including shares and bonds, except for those exempt from income tax, which will start with taxes by 5 %, as a mourning on Sunday.

The minister, who spoke after his return from a meeting with President Luise Inacio Lula da Silva, said that the additional revenues resulting from the package will be used in the first place to review the increase in the financial process of the previously imposed on Forvie operations.

The IOF Decree, which was provided to increase public revenues and raise the tax on private pension funds and some credit transactions and foreign transactions, led a strong impulse from both Congress and the market players, prompting the government to search for an alternative path as the legislators threatened to cancel the procedure.

Haddad defended the new financial measures on Tuesday, on the pretext that it is likely to support the strengthening of the Brazilian currency, paving the way for interest rate discounts, and helping to ensure compliance with the financial goals for this year and 2026.

(Participated in the reports of Marcela Aires