The deputy secretary of the Brazilian IRS (Receita Federal), Ricardo Pinheiro, says that record February tax collection, totalling US$ 13.085 billion (27.568 billion reais) was due to "…continued, sustained strong economic performance in general and efficient tax administration."
February 2006 tax revenue was up 4.58% over February 2005, bolstered by a 40% increase in tax revenue from vehicle sales (which were up almost 13%).
However, in spite of the strong performance, because February has fewer working days, tax revenue was actually down 15.2% when compared to January 2006.
Meanwhile, the number of hours worked in the Brazilian industry fell 2.13% in January in comparison with December, 2005. This is the third consecutive negative monthly result registered by the National Confederation of Industry’s (CNI) Economic Indicators study. The data for January were released, yesterday (16), in Brasília.
In the CNI’s view, the decline in the number of hours worked and the drop in industrial production suggest that companies are getting rid of excess inventory.
"At the end of last year, there was a very intense, unwanted accumulation of inventory by companies. Sales at the end of last year and the beginning of this year show that part of this inventory is being reduced, and as soon as companies reach the desired inventory level, they will start to intensify production. This ought to occur between the first and second quarter," explained the CNI’s manager of Economic Policy, Carlos Castelo Branco.
Castelo Branco also believes that the number of job offerings will begin to grow in the second quarter.
"The job market reacts to the overall environment. It reacted vigorously in 2004, through the start of 2005, and then settled down. It will probably react again but take some two months for the reaction to become more intense. The reaction should be more favorable between the second and third quarter," he affirmed.