Government will compensate lost tax revenue with higher taxes on beverages

To compensate lost tax revenue (“renúncia riscal”), one the linchpins of the government’s program to stimulate industrial production that was announced yesterday, there will be an increase in taxes on beverages (mineral water, soft drinks and beer).

The executive secretary at the Ministry of Finance, Nelson Barbosa, who made the announcement, explained that the objective was to neutralize the impact of any reduced revenue on the budget. Barbosa said he was not going to specify how much the tax increases on beverages would be. He did say that there would not be any increase in taxes on cigarettes.