Brazil plans to repatriate foreign funds to foot Covid-19 bill

While launching a potentially damaging inquiry into the federal government’s coronavirus response, Brazil’s Senate is also working to approve economic measures that it hopes will mitigate the crushing impact of the pandemic. Among the proposals on the table is a bill opening a new window for repatriating undeclared assets held abroad, in a bid to beef up the public coffers.

The idea follows that of the Special Regime for Currency and Tax Settlement (RERCT), launched in 2016 and 2017 by the Dilma Rousseff and Michel Temer governments. Surfing a wave of repatriation in several parts of the world, the program urged Brazilians to settle any legally obtained assets held abroad which had not been declared to the federal revenue service. The entire scheme was completely voluntary and generated BRL 52.5 billion (USD 9.66 billion) in revenue for the Executive.

As an incentive to repatriate undeclared assets, the government offered lenient taxes, fines, and interest rates. Forty-six percent of the revenue was distributed to state and municipal governments, while the majority was used to pay off part of the federal government’s unpaid liabilities.

And it is...