Brasília – The economy contraction and tax incentives were responsible for the federal collection to stay practically stagnant in March. Last month, Union’s revenues fetched R$ 94.112 billion (US$ 32.1 billion), an increase of only 0.48% over the same month in 2014, taking in to account the oficial inflation rate as measured by the Extended National Consumer Price Index (IPCA).
Despite the slight increase, federal tax collection is still declining year-to-date. From January to March, the government collected R$ 309.376 billion (US$ 105.8 billion), an amount 2.03% lower than the 2014 Q1, also with the IPCA taking into account. For Q1, the results, considered as inflation-adjusted values, is the worst since 2011.
According to the Federal Revenue, the main fator that influenced the real decline in tax collection in this year’s Q1 was the weak performance of the economy. The falling of production, consumption and profitability of the companies had the Federal Revenue collecting less.
Affected by the 5.71% drop in industrial production, the collection of the Tax on Manufactured Products (IPI), charged over local products dropped 7.02% in Q1, with the IPCA considered already. The drop of 5.42% on sales of goods and services made the tax collection of the Social Integration Program (PIS) and the Contribution for Social Security Financing (Cofins) decline 4.3% with inflation already adjusted. Since these taxes incur on the companies’ revenues, they reflect consumption.
Despite the growth of 7.4% in payroll from January to March, the tax collection of security contribution posted an accumulated real (inflation adjusted) decline of 2.82% in 2015. The retraction occurs due to payroll exemption, which made Social Security collect R$ 5.6 billion (US$ 1.9 billion) less in Q1 in comparison to the same period in 2014.
*Translated by Sérgio Kakitani
