Tax-Exempt Bonds Cost Brazil $11 Billion, Treasury Head Says (1)

Brazil’s public coffers lose 60 billion reais ($11.3 billion) per year as government debt issuances face cut-throat competition from tax-exempt local bonds, Treasury Secretary Rogerio Ceron said in an interview.

The government shells out roughly 40 billion reais in extra yield to lure investors away from the zero-tax regime that’s tied to infrastructure projects, Ceron said, although he cautioned that the figure was an estimate because official figures are difficult to calculate. Adding insult to injury, public accounts take a further hit of 20 billion reais per year in lost revenue to those type of bonds, which are growing in ...