Brazilian Financial Market Applauds Tax Exemption for Foreigners

The President of Brazil’s National Association of Financial Market Institutions (ANDIMA), Alfredo Neves Penteado Moraes, defined as a "great progress" the government’s temporary executive order (Medida Provisória, in Portuguese – MP) number 281, which exempts from tax foreign investments in the country.

Moraes believes the MP is stimulating a greater participation of foreign investors, for improving investment conditions. The MP 281 was based on a proposal designed by ANDIMA, that was presented to economy authorities by the end of last year.

Moraes praised the government, especially the Secretary of the National Treasury, Joaquim Levy, for realizing how adequate the idea was and for having had the ability to make it feasible.

The Brazilian government has decreed a tax exemption for foreign investors who buy government debt bonds – on the stock market or on money markets.

Such investors will be exempt from both income tax and the CPMF – a debit tax on all financial transactions.

According to the head of the Secretariat of the National Treasury, Joaquim Levy, the measure will bring an extra US$ 4 billion to Brazil this year and, possibly, as much as US$ 10 billion next year.

Levy pointed out that similar tax exemptions exist in other countries, such as France, Germany, Argentina and Mexico.

"This is not an innovation. We are just making adjustments to our improved economic situation," he declared.

ABr

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