Preview of tax burden rises to 33.9% of GDP in 2021

The preview of the tax burden (weight of taxes and other taxes on the economy) rose to 33.9% of the Gross Domestic Product in 2021, the National Treasury announced today (4). In 2020, the same indicator had reached 31.76%, a difference of 2.14 percentage points.Preview of tax burden rises to 33.9% of GDP in 2021Preview of tax burden rises to 33.9% of GDP in 2021

According to the Treasury, two factors contributed to the decrease in the tax burden. The first was the reversal of several tax exemptions and reductions granted during the most acute phase of the Covid-19 pandemic. The restoration of the Tax on Financial Operations (IOF) rates on credit alone accounted for an increase of 0.27 percentage point of GDP.

The second factor was the recovery of economic activity after the 2020 contraction. With the rise in production and consumption, more people pay taxes. This can be explained by the increase of 1.28 percentage points of GDP in the collection of taxes on goods and services.

The collection of the Tax on Circulation on Goods and Services (ICMS), administered by the states, increased by 0.58 percentage point of GDP in 2021. In addition to the recovery in consumption, the increase reflects the rise in prices of products and services that rose above inflation last year, such as electricity and fuel.

Other taxes that stood out in the increase in the tax burden were the Social Integration Program (PIS) and the Contribution to the Financing of Social Security (Cofins), with growth of 0.22 percentage points, and the Tax on Services (ISS), administered by the municipalities, with an increase of 0.06 percentage point. The two taxes are linked to consumption and reflect the rise in sales.

Every March, the Treasury publishes its own estimate of the previous year’s tax burden. However, because of the standard operation and the stoppages of the agency’s servers, the disclosure moved to the first week of April.

According to the Ministry of Economy, the preparation of a preview of the tax burden is necessary because the data are included in the accountability of the Presidency of the Republic. The official number, released by the Federal Revenue, only comes out during the second half of the year.

Source link

Previous Story

President Gabriel Boric summons Argentine journalist for human rights violations: «They always ask me about Venezuela, Cuba and Nicaragua, but not about Chile»

Latest from Brasil