Brazil's tax burden reaches 35.8 percent of GDP in 2008

• Source: Xinhua
• [10:29 July 09 2009]
• Comments

Brazil's tax burden reached 35.8 percent of the country's GDP in 2008, the Brazilian Secretariat of the Federal Revenue announced on Tuesday.

According to the Secretariat, the volume of all taxes paid by the Brazilian citizens totaled 1.03 trillion reais (520 billion US dollars) last year. In 2007, the taxes totaled 901 billion reais (455 billion dollars), representing 34.7 percent of the country's GDP.

The tax burden increased in 2008 despite the fall in the tax collection in the last months of the year, an effect of the international financial crisis, and the extinction of the CPMF (Temporary Contribution on Financial Transactions) tariff.

The increase was attributed to the higher incidence of the Tax over Financial Operations (IOF) and of the tax over the banks' profit, as well as to the Federal Police's increasing vigilance against tax evasion crimes.

Both federal and local taxes registered an increase in 2008, the Secretariat informed. Federal taxes' burden increased from 24.3 percent of the GDP in 2007 to 24.9 percent in 2008, while the state taxes' burden jumped from 8.8 to 9.2 percent, and the municipal taxes' burden went from 1.5 to 1.6 percent of the GDP.

Brazil's tax burden is considerably higher than other emerging countries' such as Mexico (19.8 percent of the GDP), but it is comparable to the burden registered in developed countries.

According to experts, Mexico's tax burden may register this year the first fall since 2003, due to tax collection fall caused by the international financial crisis.