The persistently lower-than-expected tax revenue in Brazil may lead the government to change this year’s fiscal target as soon as next week, said the Planning Minister, Dyogo Oliveira. “We are experiencing continued revenue frustration,” he said during an event in Sao Paulo. “We will evaluate next week, and we will let you know,” he said while commenting on a possible change in the fiscal target.
Brazil aims to achieve a R$ 139 billion primary deficit this year, but analysts and investors believe that the country will struggle to meet that objective. At the end of July, the Brazilian government announced a twofold increase in fuel taxes in an attempt to raise revenues.
The decision came only a week after the Brazilian Federal Court of Audit (TCU) said that the federal government could miss the 2017 fiscal target. According to the court report, a large part of this year’s expected revenue refers to public asset sales scheduled to the end of this year that could face delays. Investors were wary of the Brazilian fiscal target since the start of the year.
A survey by the Finance Ministry conducted at the beginning of July showed that economic experts believed that Brazil’s primary deficit in 2017 would reach R$ 145.268 billion – above the R$ 139 billion deficit target. During the event in Sao Paulo, Oliveira also said that the government is still assessing the need to raise taxes further as a way to meet the fiscal target.