The government on Oct. 1 will reduce tax cuts on items ranging from refrigerators to stoves, effectively raising the levy to 10 percent from 8.5 percent and 4 percent from 3 percent respectively, the Finance Ministry’s economic policy Secretary Marcio Holland told reporters in Sao Paulo today. The increases also will impact furniture, he said.
The decision came hours after the Treasury unveiled a primary fiscal surplus of 87 million reais ($39 million) for August, the worst result for the month since 1997. The government has cut spending twice this year by a total of 38 billion reais to meet its 108 billion-real primary surplus target, which excludes money due on interest payments.
“This is a result that requires attention,” Treasury Secretary Arno Augustin told reporters today about the budget data.
The real, which has depreciated 8.9 percent so far this year, weakened 0.3 percent today to 2.2523 a dollar.
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