SAO PAULO, July 12 (Reuters) - The Brazilian government, facing a larger-than-expected budget deficit this year, will spare a financial transaction levy from its plans to hike tax rates, Valor Econômico newspaper said on Wednesday, citing a senior policymaker.
Valor cited Fabio Kanczuk, a senior Finance Ministry official, as saying that targets for hikes include the IPI industrial products tax and the PIS/Cofins social security portion of a fuel tax. Kanczuk spoke to Credit Suisse Group AG’s clients in a Tuesday conference call, Valor said.
Those hikes could take place as early as this year, Valor said, citing Kanczuk. He told the conference call that the so-called IOF financial transaction tax on loans or currency transactions would be kept unaltered, because changes in those levies “do more evil than good,” according to Valor.
Efforts to contact the ministry’s press office for comment before working hours were unsuccessful.
President Michel Temer’s government has been scrambling to meet this year’s budget target without resorting to tax hikes. Years of profligate spending by his predecessor Dilma Rousseff made Brazil plunge into a recession not seen in more than a century, post record budget deficits and lose investment-grade ratings. (Reporting by Guillermo Parra-Bernal; Editing by Chizu Nomiyama)