Brazil Wants to Reduce Taxes for Foreigners Buying Stocks

Brazil’s Ministry of Finance is studying a proposal to grant certain tax exemptions to foreigners who invest in the Brazilian stock market.

According to the secretary of the National Treasury, Joaquim Levy, the taxes the Ministry has in mind are the income tax and the Provisional Contribution on Financial Transactions (CPMF, the "check tax").

Easing the tax burden on foreign investment would be a way to inject leverage into the country’s financial market, Levy believes. "The government is responsive; it is watching," he says.

One of the proposals under examination was submitted to the federal government at the end of last year by the National Association of Financial Market Institutions (ANDIMA).

An ANDIMA study suggests that reducing taxes on foreign investors could increase the amount invested in fixed-rate titles from the current level of US$ 4.57 billion (R$ 10 billion) to US$ 13.71 billion (R$ 30 billion).

At the time the proposal was presented to the National Treasury, the president of ANDIMA, Alfredo Moraes, stated that the goal is to encourage the participation of foreign investors in order to induce local investors to make longer-term investments and accept more fixed-rate titles.

In Levy’s opinion, Brazilian investors will not consider themselves discriminated against. "This [sort of treatment] is common in most of the world," he said.

He went on to explain, however, that the proposal is still being analyzed and the final word is still out.

The ANDIMA proposal would have foreign investors continue paying taxes at the current rate of 15% on investments of up to one year. The rate would decrease to as low as 0% for investments of more than two years.

Agência Brasil

Tags:

You May Also Like

Farmland in South of Brazil Now Costs More than in Southeast

Prices of farmland have risen sharply of late in Brazil, driven up by rising ...

Lula Wants the G20 to Put an End to the Currency War

The president of Brazil, Luiz Inácio Lula da Silva, said that the G-20 group ...

Brazilian Politics Leonard Cohen Style

Whenever I try to follow the ins and outs of Brazilian politics with its ...

13,000 Family Farmers Enrolled in Brazil’s Biodiesel Program

Brazilian Petrobras Biofuel's Montes Claros Biodiesel Plant should deliver 1.5 million liters of biodiesel ...

Machinery industry has optimistic forecasts for 2007

The machinery and equipment sector will have in 2006 a performance similar to that ...

Venezuelan Proposal to Limit Freedom of Press in South America Alarms Brazil

To the already charged agenda of South America's Unasur summit, which opens this Monday ...

Brazilian Company Does Satellite Mapping of Haiti

The Brazilian Agricultural Research Company (EMBRAPA) was responsible for all the satellite mapping done ...

Bye Bye, Rat Race! Hello, Brazil!

My leaving the United States for Brazil, a place I’d never been, was like ...

Brazilian Metal Company Plans to Compete with China in Arab Market

Soprano, manufacturer of iron fittings and hydraulic equipments based in the city of Farroupilha, ...

Brazil Gets 40,000 Leprosy Cases a Year

An agreement among Brazil’s Ministry of Health, the Pan-American Health Organization (PAHO), and the ...