As the Covid-19 pandemic slows down economic activity in Brazil, it also hampers the government’s tax revenue. In April alone, Brazilians paid BRL 93 billion (USD 17.4 billion) less in taxes, as income tax deadlines were postponed as a way to help individuals and companies weather the crisis. “It is going to get worse,” said Treasury Secretary Mansueto Almeida.
During the January-April period, tax revenue fell 10 percent in comparison to the same months in 2019, and Mr. Almeida warned that the results for the Q2 2020 “will be bad without precedent.” The primary result for the past 12 months is a BRL 189.5-billion deficit (2.5 percent of GDP), and public accounts could close the year with a BRL 675-billion deficit (9.5 percent of GDP)
An important change in the fiscal results was the deficit in the Treasury Department’s budget. Results were positive before the pandemic, but spending on Social Welfare has reversed the situation, creating a deficit of BRL 9.8 billion in April.
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