Brazil to Extend Payroll Exemption Program Without Compensation

Brazil has decided to extend a corporate payroll exemption program until 2023 without adopting measures to compensate for the loss of revenue, according to a statement released by the Presidency’s General Secretary.

The new program, which will cost public coffers around 9 billion reais ($1.6 billion), is already included in the 2022 budget bill and doesn’t require extra compensation measures, said the statement. The economic team was studying the possibility to use a tax on financial transactions, known as IOF, to offset the tax break on payrolls.

The IOF rate was temporarily raised last year to finance President Jair Bolsonaro ...