Brazil’s Federal Revenue in May Reached R$113.2 Billion

By Contributing Reporter

RIO DE JANEIRO, BRAZIL – Federal revenue collection totaled R$113.278 (US$28) billion in May 2019, the Federal Treasury Department (SRF) of the Ministry of Economy reported on Monday, June 24th.

There was a real increase (discounting inflation) of 1.92 percent over the same month in 2018. This was the highest result for the month of May since 2014, when revenues exceeded R$116 billion.

In the year to date (January to May), federal revenues totaled R$637.649 billion, a real increase of 1.28 percent over the same period in 2018, when R$603.400 billion were collected.

Sales of goods and services, which grew 2.35 percent and 0.93 percent, respectively, in the first five months of the year, compared to the same period last year, contributed to the increase in revenue. Meanwhile, the collection linked to industrial production shows a 2.05 percent drop in the first five months of 2019, compared to the same period in 2018.

In May, revenue covered by other agencies (mainly oil royalties) totaled R$2.535 billion. Revenue covered by the SRF (such as taxes and contributions) reached R$110.753 billion, a real variation of 1.84 percent over April of last year.

Highlights

Among the contributing factors are corporate income tax and contribution on corporate profits, which grew, in real terms (discounting inflation), a total of 5.77 percent over May of last year.

“As the collection of income tax is quite significant in the share of the total collection, this 5.77 percent figure helps to explain this positive balance of 1.84 percent of the final result of the revenue administered by the Federal Treasury Department,” explains the head of the Center for Tax and Customs Studies, Claudemir Malaquias.

According to the SRF, the collection of income tax withheld at source on capital gains, due to redemption of investments in fixed income and fixed income funds, grew 23.47 percent in the month of May over the same month of last year.

The Tax on Industrial Products (IPI), levied on production and importation of goods, also registered significant growth in May — 9.61 percent in comparison with the same period in 2018.

Conversely, the month of May 2019 saw a reduction in the amount collected as Special Installment Payments for tax debts, as well as the PIS/Cofins and Cide taxes on diesel oil, in the latter case due to the tax reduction granted by the government in the agreement with truck drivers, after the sector’s strike in 2018.

The result of the government’s collection is significant as it impacts compliance with the fiscal goal. In 2019, the government expects a deficit of up to R$ 139 billion.