Brazil’s government is studying ways to revive a tax on bank transactions as it struggles to reverse the budget deficit and prevent a credit downgrade to junk, Finance Minister Joaquim Levy said.

It was the first time that Levy confirmed the government is considering the tax known as CPMF, which Congress eliminated in 2007. He spoke in an interview that aired on SBT television Friday night.

"New tax collection, probably in the format of the CPMF, will be needed," he told SBT.

Reports in newspapers such as Folha de Sao Paulo that the government would revive the tax met with criticism this week, as lawmakers including Senate President Renan Calheiros said Brazil needs to cut spending before it raises taxes any more. Annual inflation has accelerated every month this year, hitting a more than 11-year high in July.

The new tax on everything from bank transfers to cash withdraws could raise as much as 80 billion reais ($22 billion) next year, a person with knowledge of the government’s discussions said this week. That would dwarf measures Levy already pushed through Congress this year to raise taxes on imports and company sales revenue.

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