Brazil Senate votes to extend asset repatriation amnesty

November 24, 2016 7:54 AM EST

Brazil's President Michel Temer speaks during the inauguration ceremony of the new Minister of Culture, Roberto Freire at the Planalto Palace in Brasilia, Brazil November 23, 2016. REUTERS/Ueslei Marcelino


Get daily under-the-radar research with StreetInsider.com's Stealth Growth Insider Get your 2-Wk Free Trial here.

BRASILIA (Reuters) - Brazil's Senate has approved an extension of a program allowing Brazilians to repatriate undeclared off-shore assets that collected 46.8 billion reais ($13.8 billion) in taxes and fines for the country's cash-strapped government.

The bill passed by the Senate late on Wednesday would reopen the repatriation window for another 120 days next year and is expected to win approval from the lower chamber before the end of the year as it would give debt-ridden state and local governments a larger share of the revenues.

The bill raises the tax on repatriated assets to 17.5 percent from 15 percent, and hikes the fine similarly, for a total 35 percent penalty.

President Michel Temer's government is hoping to collect a further 30 billion reais in taxes and fines from Brazilians wanting to declare some of the billions of dollars they are estimated to hold off shore.

The proceeds would help Temer's effort to balance Brazil's budget and restore fiscal discipline to Latin America's largest economy, which is caught in its worst recession since the 1930s.

The government collected more than it expected in the first phase of the program this year. It has promised to share $5 billion of the funds gathered in fines with Brazil's state governments, several of which are close to insolvency.

A final decision depends on whether the central government can meet its primary deficit goal of 163.9 billion reais this year, a presidential aide told Reuters.

The government raised its revenues estimate for 2016 thanks to the hefty proceeds collected from the asset amnesty program and plans to use part of them to pay down accrued obligations that total about 180 billion reais.

Federal prosecutors investigating millions of dollars in bribes and kickbacks stashed in off-shore accounts in Brazil's biggest ever corruption scandal have opposed the repatriation amnesty.

"The repatriation bill is a money laundering bill. It is shameful because it fosters impunity from serious crimes," federal prosecutor Douglas Fischer told the Estado de S.Paulo newspaper.

(Reporting by Anthony Boadle; Editing by Lisa Shumaker)



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In






Related Categories

Reuters

Add Your Comment