Brazil Creates Project to Repatriate Illegal Money

07/10/2015 - 10h17

Brazil's Minister of Finance, Joaquim Levy, and pro-government senators agreed in a meeting held on Thursday (9) to make a series of changes in the law that will allow undeclared money from Brazilian immigrants to be brought to the country legally.

The plan is to set an income tax of 17.5% and an equal percentage of fines, meaning 35% of the total amount. The money can still be kept abroad, if the taxpayers so desire, but it will have to be reported to the Federal Department of Taxation.

There will be 180 days to adjust to the new rules. According to the senators, Brazil's Finance Department estimates that there are US$ 62 billion (R$ 200 billion) of undeclared money out of the country.

"The aim is to get resources to invest in infrastructure projects, regional development and ICMS [Brazilian equivalent of VAT], unlocking investments," said Finance Minister, Joaquim Levy, after the meeting.

The senators want to approve the project to make possible changes in the collection of ICMS, making it simpler. The States that would lose with the change demand compensation, so a fund will be created to provide resources for their infrastructure works.

According to Senator Blairo Maggi (PR-MT), the idea is that some of the money from fines and repatriation taxes go to a fund that will compensate the States for their losses. It is estimated that this fund needs from US$ 186.2 million (R$ 600 million) to US$ 310.4 million (R$ 1 billion) per year.

"Crime always runs ahead of the law. One can try [to bring illegal money], but the Federal Police, the Public Prosecutor's Office and the Finance Department will use their monitoring mechanisms to prevent this from happening," said senator Eunício Oliveira (PMDB-CE).  

Translated by JULIANA CALDERARI

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	Pedro Ladeira/Folhapress
	Brazil's Minister of Finance, Joaquim Levy