Brazil Raising Taxes on Home Appliances After Surplus Narrowed

Brazil will increase taxes on home appliances after the government today posted its lowest primary budget surplus in 16 years.

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.

To contact the reporter on this story: Felipe Frisch in Sao Paulo at ffrisch1@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.