Brazil Proposes Tax Break Cuts to Avoid IOF Hike

Brazil's government is expected to back a bill proposing a 10% reduction in federal tax breaks as an alternative to a proposed increase in the tax on financial transactions. The bill, introduced by Mauro Benevides, suggests a phased cut and does not affect the Manaus free trade zone and non-profits.

Brazil's government plans to support a bill advocating for a 10% cut in federal tax breaks as an alternative to a controversial hike in the tax on financial transactions (IOF), according to sources.

The proposal by lawmaker Mauro Benevides suggests a 5% reduction in tax benefits in 2025, followed by another 5% in 2026. Exemptions include the Manaus free trade zone and non-profit organizations.

Finance Minister Fernando Haddad mentioned that new fiscal measures would be unveiled soon to balance public accounts, with the bill's approval seen as vital to reconsidering the IOF tax increase.

(With inputs from agencies.)