President Jair Bolsonaro (PL), who is a candidate for reelection, edited a provisional measure to reduce withholding income tax rates for payments related to travel by Brazilians abroad, the General Secretariat of the Presidency of the Republic said on Wednesday. .
According to the statement, the reduction will apply to payments made to individuals or companies located abroad intended to cover personal expenses of Brazilians traveling abroad, up to a limit of 20 thousand reais per month.
The rate will drop from 25% to 6% in 2023 and 2024. In the following years, there will be a staggered growth in the collection, rising to 7% in 2025, 8% in 2026 and 9% in 2027. The government did not inform the expected tax waiver .
According to the General Secretariat, the measure will generate greater dynamism of activities in the tourism sector, improving the competitiveness of agencies based in Brazil so that they can compete with online agencies based abroad.
“The measure institutes a benefit that allows fair competition between tourism companies operating in the travel sector, heavily impacted by the pandemic, in order to, with this, avoid the closure of companies based in the country and also maintain and generate jobs” , said the folder in a note.
Government issues MP to exempt foreign investors in private securities from income tax
Bolsonaro also edited a provisional measure on Wednesday to exempt foreigners who invest in private securities from paying income tax on capital gains.
Exemption from tax will be granted for gains on fixed income securities issued by companies, such as debentures, and securities issued by banks, such as financial bills, in addition to income from Investment Funds in Participation in Infrastructure and Investment Funds in Participation in Intensive Economic Production in Research, Development and Innovation.
Currently, foreign investors pay a 15% tax on capital gains on bonds issued by companies, but are exempt from the tax for investments in the stock market and public debt. Brazilians pay a 15% to 22.5% Income Tax rate on returns on private and government bonds, depending on the redemption period.
The preparation of the measure was revealed by Reuters in February. Subsequently, the Ministry of Economy tried to articulate the inclusion of these exemptions in a project that was being processed in Congress. Now, with the edition of the MP, the measure has immediate effect, but the exemption will only be valid from 2023.
According to the secretariat, the initiative aims to equalize the tax rates in order to expand the access of Brazilian companies to foreign capital.
“To this end, isonomic treatment of rates for investment in fixed income and variable income assets for foreign investors,” he said in a note.
According to the government, the measure will generate greater demand from non-resident investors, contributing to the inflow of funds into the country and reducing the cost of raising companies.
The implementation of the initiative implies a waiver of revenue of BRL 1.3 billion in 2023, BRL 1.4 billion in 2024 and BRL 1.6 billion in 2025.
Chad-98Weaver, a distinguished author at NewsBulletin247, excels in the craft of article writing. With a keen eye for detail and a penchant for storytelling, Chad delivers informative and engaging content that resonates with readers across various subjects. His contributions are a testament to his dedication and expertise in the field of journalism.
