Driven by the recovery of the economy and by extra tax revenues linked to corporate profits, the federal tax revenue set a record for the months of November. According to data released today (21) by the Federal Revenue, the government collected R$ 157.34 billion last month, with an increase of 1.41% above inflation in values corrected by the Broad National Consumer Price Index (IPCA).
The value is the highest in history for the months of November since the beginning of the Federal Revenue’s historical series, in 1995, in values corrected for inflation. From January to November, federal collections total R$1.685 trillion, up 18.13% above IPCA inflation, also a record for the period.
The collection exceeded the forecasts of financial institutions. In the Prisma Fiscal report, a survey released by the Ministry of Economy, market analysts estimated that the amount collected would be R$ 151.513 billion in November, using the median criterion (the central value around which a given figure fluctuates).
The recovery of the economy, which this year should close with a growth of around 4.5%, is boosting collection, with a reinforcement of R$ 3.69 billion in November compared to November of last year in values corrected by the IPCA. However, unusual factors and changes in legislation also contributed to the rise.
Atypical collections
The collection in November was also driven by the atypical collection (which will not be repeated in other years) of around R$ 3 billion in November in Corporate Income Tax (IRPJ) and in Social Contribution on Net Income (CSLL) by large companies companies. From January to November, atypical collections add up to R$39 billion, against just R$6.5 billion in the same period in 2020.
Throughout 2021, these out-of-season collections have boosted collections because of companies that posted higher-than-expected profits and had to pay the difference. Due to fiscal secrecy, the Revenue is unable to inform the name and activity of these large companies. Tax offsets, when a taxpayer asks for a reduction or discount on taxes payable, fell by R$5.33 billion in November, boosting collection.
THE IOF increase, which went into effect at the end of November to fund Auxílio Brasil, also helped to improve tax collection. The weak base of comparison in IOF revenues in 2020 also helped.
From April to December of last year, the IOF on credit operations was reset to make the emergency credit lines granted during the pandemic cheaper. Together, the two effects – an increase in the IOF tax and a weak basis for comparison last year – raised revenue by BRL 710 million last month compared to November 2020
Taxes
In terms of taxes, the biggest increases in November – compared to the same month in 2020 – were registered in the collection of the IOF, an increase of R$ 3.75 billion (+322.65%) above inflation by the IPCA. Then come the IRPJ and CSLL, with growth of R$ 2.73 billion (+12.12%) above inflation, driven by the unusual payment of large companies and the increase in corporate profits.
In third place are the income from Withholding Income Tax on capital operations, with an increase of R$ 1.06 billion (+34.52%) above inflation. However, other indicators that were growing throughout 2021 began to decline in the final quarter of the year.
The collection of Social Security, which reflects formal employment, fell 6.42% discounting the IPCA inflation in November compared to the same month in 2020. Influenced by the slowdown in sales and the service sector, the collection of the Integration Program Social Security (PIS) and Contribution to Social Security Financing (Cofins), fell 11.10%, also discounting inflation. As they affect billing, PIS and Cofins are linked to consumption.
