By Chesney Hearst, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – Brazil will increase taxes on furniture, wood paneling and home appliances including refrigerators, stoves and semi-automatic washing machines beginning on Tuesday, October 1st following lower surplus results than expected.
The Tax on Industrialized Products (IPI) rate is expected to increase from three percent to 3.5 percent for furniture and wood paneling and the rate for stoves is expected to go from three percent to four percent. The tax rate for refrigerators will see the largest jump, climbing from 8.5 percent to ten percent.
The Secretary of Economic Policy of the Ministry of Finance, Márcio Holland, made the announcement on Friday, September 27th, hours after Brazil’s Treasury unveiled August’s primary fiscal surplus of only R$87 million (US$39 million), the lowest numbers ever recorded for the month of August and the lowest monthly budget surplus recorded in the country since 1997.
In July, the surplus came in at R$3.77 billion and August’s figures represent a 97.7 percent decrease. The primary surplus balance is a number typically watched closely by investors because it is thought to show a country’s ability to service its debt. Brazil missed its primary surplus target in 2012.
The target for the central government set by the Budget Guidelines Law (LDO) for the first semester of 2013 was R$35 billion and the goal for the end of the year is is R$73 billion.
Estadão reported that Treasury Secretary, Arno Augustin, suggested that the surplus accumulated in the last 12 months is close to the central government’s target and was expressed some concern over August’s fiscal surplus result. “It’s a result that requires attention and we are taking care to meet the schedule,” he told the press.
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