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In order to overcome one of the obstacles to Brazil's membership in the Organization for Economic Co-operation and Development (OECD), the Ministry of Economy is studying the increase of the rate of the IOF tax on foreign exchange transactions now exempt. The measure will be necessary to offset a loss of revenue if the country is required to meet certain organizational requirements.
The IOF is currently focusing on several types of foreign exchange transactions and generates a turnover of R $ 5 billion a year. However, the OECD condemns this accusation because it regards the tax as a kind of "multiple exchange", which in practice prevents the government from lifting taxation at a time of fiscal tightening
.
People participating in government discussions say the country will try an alternative.
Instead of ending the IOF exchange, he intends to propose to reduce the number of
The first week of the Bolsonaro government, there was a confrontation between the palace of Plbadto and the Ministry of Finance. Economy, and the president himself announced that r increasing IOF tax rates, by decree, to offset the extension of tax benefits granted to businesses in the North and Northeast. The presidential speech was eventually refused and the rise did not occur.
There are currently four: 0%, 1.1%, 6% and 6.38%. Purchases made with the credit card charge 6.38% of the value of the transaction, for example. Companies that take out loans abroad for a maximum of six months receive 6%. Remittances to foreign residents and acquisition of foreign currencies at exchange offices: 1.1%.
Internalisation transactions of resources obtained from export are exempt, as are dividends paid abroad. Dozens of other transactions are exempted.
The idea is to propose the permanence of only two rates, thus simplifying the structure of IOF-Exchange. To compensate for the loss of recovery, the currently exempt categories should be taxed.
Brazil will submit this Friday (8) to the OECD a proposal to reduce the number of tax rates, which is a new step in the process of accession of the country to the # 39; international organization [19659002] For Brazil, acceptance would be a chance to join a group bringing together the richest and most influential countries of the world, which create international rules adopted by all nations. Being part of this club, is involved in the development of this regulation.
To join, however, the country must respect the parameters adopted by the other partners. As a result, the government hopes to gain external credibility, which would reduce the long-term financing costs of the country and Brazilian companies.
The government has been preparing for membership since 2017, but the road is difficult, both from a compliance point of view and acceptance of the United States, the main OECD member.
In the past, Donald Trump had expressed his preference for Argentina in Brazil. Nevertheless, the country continues preparations for adjustment.
On Friday (8), Brazil delivers a letter with all its reservations or limitations to the OECD rules. The organization is not the only one to condemn the IOF exchange. The IMF (International Monetary Fund) constantly criticizes this taxation.
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