Brazilian Government Discusses Modifying Repatriation Bill to Attract More Funds

07/27/2016 - 11h05

After initial resistance, the Ministry of Finance now admits discussing specific changes to improve the bill of regularization of illegal funds held by Brazilians abroad and seeking higher tax collection.

The issue will be discussed by Finance Minister, Henrique Meirelles, and the Lower House speaker, Rodrigo Maia (DEM-RJ), on Wednesday (27).

One of the changes under discussion, supported by tax experts, is about the amount to be taxed.

They argue that the income tax and the penalty should only be applied to the amount registered abroad at December 31, 2014.

Brazilian Federal Revenue Office (Receita Federal) argues that the original version of the bill should be maintained, also taxing the total value of goods and resources that Brazilians have held abroad but which were sold or spent.

Initially, Meirelles was against changing the bill. Now, however, he says that the mood in the Lower House, with Maia in charge, is different, allowing changes without the risk of distorting the purpose of the bill.

Within the government, advocates of change say they are necessary in order to make the bill generate more resources to the federal government. The expectation was that the law could generate at least R$ 21 billion (US$ 6.4 billion) into the federal coffers, but the revenue so far stood in around R$ 8 billion (US$ 2.4 billion).

The bill approved allows the regularization of resources abroad not declared to the Revenue Office, as long as the holder pays an income tax rate of 15% and a fine of 15%. With the regularization, the holder of overseas resources will be pardoned of crimes of currency evasion, money laundering, tax evasion and data falsification.

Translated by MARINA DELLA VALLE

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