Brazil tax revenue falls to lowest for June in 16 years

Credit: REUTERS/Adriano Machado

By Jamie McGeever and Gabriel Ponte

BRASILIA, July 23 (Reuters) - Brazil's federal tax take in June fell to a 16-year low for the month as the coronavirus crisis continued to bite, official figures showed on Thursday, although it rose from May, suggesting a trough may have been reached.

Central bank president Roberto Campos Neto had said earlier this month that recent tax collection data was among indicators suggesting the economy was rebounding more strongly than many, including the central bank, had expected.

Revenue service officials on Thursday agreed that the economic upswing will lead to higher tax revenues in the months ahead, although full recovery from the lows of March-May will be gradual.

"Indicators are showing that the economy is moving again and that the loss of revenue due to the pandemic may recover by the end of the year," said Claudemir Malaquias, head of tax and customs at the revenue service.

"July is already reflecting this. This trajectory should continue in the coming months, and the economic recovery should be reflected directly in tax revenues," he said.

Malaquias was speaking after figures showed tax revenue in June totaled 86.3 billion reais ($16.7 billion), down 29.6% in real terms from a year earlier and the lowest take for the month since 2004.

It was also less than the 88.3 billion reais forecast in a Reuters poll of economists. For the first half of the year, Brazil's total tax take was 666 billion reais, down 14.7% in real terms, the revenue service said.

But compared to the previous month, June's tax revenue was up 11.5%, the data showed, the first month-on-month increase since January.

Brazil's tax take last year of 1.54 trillion reais was the highest in five years, and before the pandemic struck officials had expected it to increase this year.

($1 = 5.18 reais)

(Reporting by Jamie McGeever Editing by Tom Brown and Chizu Nomiyama)

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