The [Brazilian] treasury team had set up an operation for less than US$600 million, or roughly US$140 million, based on promising to pay Brazil’s exports in yuan. Argentina’s reserves decline when they are held in yuan to support Brazilian exports. After meeting with Argentine economics minister Sergio Massa, Brazilian finance minister Fernando Haddad stated that the country no longer needs to use these reserves to ensure exports thanks to CAF’s assistance.
Brazil’s exports to Argentina have suffered as a result of Argentina’s severe economic crisis and its recent move to weaken the official exchange rate for the peso. Brazil’s top trading partner with Argentina is from where it purchases high-end goods like automobiles and parts.
A new 15% tax on closed-end investment funds was enacted by decree from the Lula da Silva administration in Brazil.
According to the finance ministry, the proposal, which is awaiting approval from congress, could bring in tax income of 3.21 billion reais ($655 million) this year and 13.3 billion in 2024.
Brazilian open-end investment funds are taxed, although wealthy people with net worths exceeding 10 million reais ($2 million) invest in closed-end funds, which are only taxed after the investment is fully redeemed. These accounts are used by many rich families to avoid paying inheritance taxes.
Additionally, the administration sent a bill to congress that would tax Brazilians’ assets held in tax havens.
“Assets owned by people worth more than 1 trillion reals are kept abroad. According to the finance ministry, in reality, these assets don’t pay taxes on their passive income, which includes interest and other financial revenue.
According to the ministry, the proposed tax could generate about 7.05 billion reais next year, 6.75 billion in 2025, and 7.13 billion in 2026.
Both actions will make up for the recent increases in the minimum wage—from 1,302 to 1,320 reals—and the individual income tax exemption level—from 1,903 to 2,640 reals.
The low-income sectors, which make up a significant portion of the support for the Lula government, were the target of those taxing adjustments.