Finance Minister Fernando Haddad said on the morning of Friday, 23, that the government’s retreat on the collection of tax on financial operations (IOF) to apply investments from Brazilian funds abroad aimed to avoid speculation. According to him, the government had collaboration of partners to “correct routes” and does not want to “inhibit investments abroad”.
“We had subsidies of people on the market saying that IOF could cause problems,” he said in a press interview in the morning before the opening of the market. Haddad said the government has no problem correcting routes as long as “we follow the course of meeting fiscal goals.” He also stated that he did not consider the exaggerated market reaction, as in December last year. “Given the repercussion, we had to be fast in the review.”
The minister stated that the set of measures announced on Thursday, 22, total about $ 50 billion, to “close the year”. He acknowledged that the government may have to adjust the freezing of funds by about $ 2 billion due to the retreat in the collection of IOF.
Regarding the farm communication with the Central Bank on the measures, Haddad stated that each one has a mandate. “I don’t review BC decisions,” he said. The minister said he talks to Gabriel Galipolo often and warned that there would be measures about revenue and expense. “BC does not analyze decisions of the President of the Republic, this is not the procedure.”
On Thursday, the economic team announced a series of changes in IOF, including the creation of a 3.5% rate for the application of investments from Brazilian backgrounds abroad.
Given the strongly negative repercussion between financial market agents, the farm retreated from the proposal on Thursday night, through a publication in X. With the decision, the zero rate remains in force.
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The folder also retreated in changes that had been announced in shipments intended for investments by individuals. In this case, the current rate of 1.1%will also be maintained.
People with knowledge of the subject told Estadão/Broadcast that the IOF decline has an impact of less than 10% on the expected collection with tax changes, of $ 20.5 billion this year and $ 41 billion in 2026.
The report also found that Central Bank President Gabriel Galipolo was consulted on Thursday by the Planalto Palace on the announced measures, before the government nailed the position of retreating in IOF changes.
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According to people along with the subject, Galipolo’s assessment was “decisive” for the government to change its idea about taxation. On Thursday night, an emergency meeting took place to discuss the issue. Haddad did not participate, because he was already in São Paulo.
