Brazilian federal revenue dropped in 2023

Brazil’s Federal Revenue Service on Tuesday said that government revenue amounted to BRL 2.3 trillion (USD 461 billion) in 2023, a 0.12 percent drop in real terms compared to 2022.

Robinson Barreirinhas, head of the Federal Revenue Service, said in a press conference that 2023 was “a highly challenging year.”

The immediate post-pandemic period, he said, led to peaks in revenue from commodity sectors, with boosts in prices, notably with metals and fuels.

“It’s not a drop in 2023 in relation to 2022; it’s a return to historically normal levels,” he argued.

The amount was also affected by measures taken at the end of the Jair Bolsonaro administration (2019-2022), he said, such as tax cuts on industrial goods and the waiver on fuel taxes.

Revenue over return on capital had the highest proportional increase last year, growing 21.6 percent in real terms to BRL 123 billion (USD 24.7 billion). Social security revenue increased 5 percent to BRL 620 billion, owing in part to the increase in the minimum wage, while corporate tax revenue dropped 9 percent to BRL 466 billion.

Last week, the Federal Accounts Court, a public spending watchdog, issued a report estimating a primary deficit of BRL 55 billion (USD 11 billion) this year, instead of meeting its zero-deficit target. 

Officially, the budgetary law projects revenues to reach 19.2 percent of GDP in 2024, significantly higher than in recent years, which the Accounts Court finds unfeasible.

Planning Minister Simone Tebet replied that revenues in 2024 will depend on the country’s economic performance (which in 2023 exceeded all expectations).

The Luiz Inácio Lula da Silva administration has made efforts to raise revenues, with varying degrees of success, including trying to end or limit payroll tax breaks for 17 economic sectors — a debate still ongoing with congressional leaders.

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