Copom, Brazil’s Monetary Policy Committee, linked to the Central Bank (Brazil’s Fed), decided to raise Brazil’s benchmark interest rate, known as the Selic, to 9.50%.
The rate had been steady at a historical low of 8.75% for nine consecutive months. The decision was unanimous and reflects concern with inflation as the Brazilian economy has charged out of the Great Recession.
At the last Copom meeting, in March, three of the eight directors had already voted to raise interest rates, but were defeated.
With this decision, the economy will slow a little and Brazil returns to the top of the list of country with the world’s highest real interest rates (which will now be 4.5% annually).
Indonesia is in second at 3%, followed by China at 2.8%. The fact is that most of the world, with everyone scalded by the international financial crisis, has their basic interest rates near zero.
Income Tax Time
Computers at the Brazilian IRS (“Receita Federal”) are humming away. An average of 190,000 income tax returns are coming in per hour. Wednesday, April 28, at noon, a total of 17,900,000 returns had been delivered.
That is almost 75% of the 24 million expected this year. Or, to put it another way, one out of every four Brazilians who have to file had still not done so. The deadline is today, April 30, at midnight.
Here is some information about income taxes in Brazil. Everyone in Brazil who had income of over 17,215.80 reais must file a return. That comes out to almost US$ 10,000 at the current exchange rate.
There are two tax rates: 15% and 27.5% (for investments there are four – the highest is 22.5%). Brazilians can deduct dependent children to the age of 21, 1,730 reais (about US$ 1,000) each.
Educational expenses can be deducted up to 2,708 reais (around US$ 1,590) per dependent. In Brazil more than 99% of all income tax filings are made electronically. And, finally, it should be pointed out that in Brazil the minimum wage (per month) is 510 reais (around US$ 300).