August Federal Revenue Reached R$119.9 Billion, 5.67 Percent Over Last Year

RIO DE JANEIRO, BRAZIL – Federal revenue collection totaled R$119.951 billion (US$30 billion) in August 2019, reported today, September 24th, the Federal Treasury Department of the Ministry of Economy.

Real growth (discounting inflation), compared to the same month in 2018, reached 5.67 percent. It is the highest result for the month since August 2014 (R$124.372 billion).

In the first eight months of the year, revenues reached R$1.015 trillion, with a real increase of 2.39 percent. The amount, corrected for inflation, reached R$1.023 trillion, the highest revenue in the period since 2014 when it reached R$1.030 trillion in amounts corrected for inflation.

According to Claudemir Malaquias, head of the Treasury’s Centre for Tax and Customs Studies, in both August and July, the result was influenced by extraordinary revenue of approximately R$5.2 billion from Corporate Income Tax and Social Contribution on Net Profit.

According to Malaquias, this occurred due to corporate reorganizations, in which taxes are levied on capital gains with the new corporate organization of these companies. He added that this often occurs at a time of economic activity rebound.

In July, this extraordinary collection stood at R$3.2 billion. Malaquias added that these reorganizations occur in large companies, including state-owned companies. According to him, if the government keeps up its efforts to privatize more companies, this will boost collection.

He also said that “the performance of tax collection is well above the pace of economic recovery. The macro-economic indicators show that we currently have a faster pace of economic activity than in 2018 and this is reflected in tax collection.”

According to the Treasury, the growth of capital gains on the sale of goods and net gains in stock exchange operations have also influenced receipts. The Treasury has also recorded growth in tax collection on financial transactions (IOF) due to the increase in the number of loan operations.

Revenues managed by the Treasury

Revenues administered by the Federal Treasury (taxes and social contributions) reached R$117.533 billion in August, with a 6.02 percent real increase, and accumulated R$971.817 billion in the eight months of the year, up 2.11 percent.

Revenues controlled by other bodies (mainly oil royalties) fell in August. These revenues totaled R$2.418 billion last month, down 5.86 percent from August 2018. From January to August, the total reached R$43.464 billion, with a real increase of 8.98 percent, compared to the same period last year.

Source: Agência Brasil