Brazil's federal tax revenue started the year with a monthly
record performance in January, following a surprising result in
2022, according to official figures released on Thursday.
The country's revenue service reported that tax revenue totaled 251.745 billion reais in January, representing a 1.14% real growth compared to the same month in the previous year, and the best performance for this period since the series began in 1995.
Brazil's federal tax revenue reached a
record level last year, driven by higher corporate and capital income taxes that largely offset government tax cuts aimed at battling inflation.
The government stated that the positive results in January were mainly impacted by a 58.14% real increase in taxes on capital income, as the country's benchmark Selic interest rate was aggressively hiked to control inflationary pressures, resulting in higher collection over fixed-income funds and bonds.
After pushing its benchmark rate from a record-low of 2% in March 2021, the central bank paused its tightening cycle in September, holding it at 13.75%.
Earlier this year, Finance Minister Fernando Haddad said
he expected revenues to be 36.4 billion reais higher than
indicated in this year's budget, the first of leftist President
Luiz Inacio Lula da Silva's new government. Haddad said the
previous value was underestimated but did not provide further
details.
($1 = 5.1585 reais)
(Reporting by Marcela Ayres; Editing by Steven Grattan)
