Originally published in the August 31 edition of World Tax Daily (Copyrights Tax Analysts)
The Brazilian Democratic Movement Party (PMDB), the largest party in Congress and an ally of President Luiz Inácio Lula da Silva, on August 20 decided to support a new version of the CPMF, the 0.38 percent bank transaction tax that expired on December 31, 2007.
The new tax, renamed the Social Contribution for (Public) Health (Contribuição Social para a Saúde, or CSS), would be levied at the rate of 0.1 percent on every debit made to a bank account. All PMDB members in Congress decided to support the government’s proposal to create the CSS in a meeting with Health Minister José Gomes Temporão.
Revenue from the tax would be destined exclusively to funding public health. The appearance of the Influenza A (N1H1) virus a few months ago fueled talk that Brazil needed more funding for public health. It is hoped that a new law project will be presented and voted on in September.
Although PMDB’s support is very important to the government, it may not be enough. Nearly a year from general elections in which the full chamber of deputies and two-thirds of the senate will be up for reelection, members of Congress may draw back their support of the CSS out of fear that voters will be unwilling to elect supporters of a new tax.
David Roberto R. Soares da Silva