increase in rates IOF (Financial Transaction Tax) On credit operations of companies and individuals. The money raised will be used to fund Auxílio Brasil, a program proposed by the government to replace Bolsa Família.
The Israeli occupation forces are a Pay federal taxes on all financial transactionssuch as credit transactions, foreign exchange, insurance, bank loans, or securities transactions. For example, on credit card purchases abroad and when a consumer enters into an overdraft, the tax is levied. But interest-free purchases in installments are not subject to the IOF fee.
According to the decree, the new daily rates for the Israeli occupation forces are as follows:
For individuals, it will increase from 0.0082% (3.0% annual rate) to 0.01118% (4.8% annual rate).
In operations for businesses, the new rate will be 0.00559% (annual rate of 2.04%) versus 0.0041% (annual rate equivalent to 1.5%) of the current rate.
The change will be effective from September 20 to December 31, 2021. The revenue of R$ 2.14 billion that will be obtained will be used as a source to offset the increase in expenditures with Auxílio Brasil, a new social program that should have more value than the current Bolsa Família. The new policy must take effect in 2021 so that it is not subject to the constraints of the electoral law.
This measure makes loans more expensive at a time when the prime rate – which acts as a benchmark for banks – is also rising. In other words, in addition to higher interest rates, the tax on operations will also increase.
For Febraban (Brazilian Confederation of Banks), the increase in taxes on credit, even if temporary, exacerbates the cost of borrowing, especially at a time when the central bank will need to increase the base rate to contain rising inflation. .
“The result is a disincentive to investments and further costs to businesses and households in need of credit. This increase in IOF is a factor impeding the economic recovery process,” the union said in a note.
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