São Paulo – According to a decree published on Thursday (14) in the Official Gazette, the government has once again changed the measure that increased to five years the levying of the Tax on Financial Operations on international loans.
The measure says that now only financing with spans of up to two years will pay 6% tax. Those with longer maturity will be free from the tax.
The government’s objective is to reduce the cost of credit for Brazilian companies and to provide incentives for banks to make loans abroad, as well as to control the appreciation of the dollar. Each dollar has been exchanged for over R$ 2 (Brazilian reals) for the last few days.
In March, the government of Brazil started levying the IOF on loans for up to five years, not three. That is because in February this year, each dollar was traded for around R$ 1.69. At the time, the Central Bank bought the currency on the spot market and on the futures market.
*Translated by Mark Ament
