Just so you will all know what is coming down the pipe and not be blindsided.
As if the taxes in this country aren't already stratospherical Brazil's Health Minister, Arthur Chioro, has proposed to reintroduce the CPMF (Contribuição Provisório sobre Movimento Financeira) which was a tax in effect until 2007, was charged on all financial transactions and was supposed to be a provisional tax dedicated to help support the public healthcare system SUS (Sistema Única da Saúde). A provisional tax that was in place for 15 years can hardly be called or even considered "provisional".
As if that wasn't bad enough, considering all the other taxes built into other financial services (water, light, gas, telephone bills, etc.) now people had to pay a tax on paying those taxes... pure robbery. Then another tax on financial transactions the IOF(Imposto sobre Operações Financeiras) was simply added on top in 2001. It didn't replace the CPMF, it was just heaped on top of it. The IOF still is charged on financial transactions today. The sickest part was that during its existence hardly any of the tax revenues generated by the CPMF actually found its way into the public healthcare system at all. Its creation was a just a fraud perpetrated on the Brazilian taxpayers from the very outset.
Now the incompetent government in this country wants to cover the losses caused by their mismanagement and robbery by simply reviving the CPMF under a new name and as a permanent tax, the CIS (Contribuição Interfederativa da Saúde). Surely it will just be added on top of the IOF, just as the IOF was added on top of the CPMF and the corrupt government of this country will just delve deeper into the pockets of the already overburdened taxpayers, sucking ever more blood out of the near-dead victim.
This tax will probably hit expats even harder than the Brazilian public, because we tend to make larger and more frequent financial transactions. We also tend to consume more energy than the lower income Brazilian families; and since these taxes are based on the amount of the transaction we'll pay proportionately higher amounts of tax.
The tax on financial transactions will also further discourage foreign investment in this country at a time when the economy is already suffering as a result of the worldwide drop in oil prices, the foundering Chinese economy upon which Brazil is far too reliant, and the endless government corruption scandals that make foreign investors (especially from the USA) extremely worried about investing here.
They've simply robbed so much that the cupboard is bare, now they want to bleed the taxpayers even more to cover those loses. It's a typical Brazilian knee-jerk reaction to cover up a much deeper problem which is surely going to backfire on them and make matters even worse in terms of the Brazilian economy.
Cheers,
James Expat-blog Experts Team