Brazilians to Pay More to Shop Abroad as ATM Tax Surges 1,600%

December 28, 2013 Leave a comment

Brazilians to Pay More to Shop Abroad as ATM Tax Surges 1,600%

Brazil will boost levies on withdrawals abroad to restrain a widening current account deficit and prevent a six-percentage point gap in tax levels from reducing the use of credit cards. The measure takes effect tomorrow and raises the so-called IOF tax on some operations, including the use of debit cards abroad, to the 6.38 percent rate already charged on credit cards, the Finance Ministry said in a statement today. Boosting the rate from the current 0.38 percent also will increase revenue by an estimated 552 million reais ($236 million) a year, according to the statement. “This measure prevents one payment method from being undermined by others because of the tax structure,” the ministry said on its website. Brazilians have increased annual spending abroad by almost tenfold in the past decade to more than $23 billion in November, according to central bank data. The government raised the tax on credit cards in March 2011 as consumer spending outside the country helped widen a current account gap that surpassed $80 billion this year for the first time on record. The real gained 0.7 percent to 2.3383 per dollar today.

To contact the reporter on this story: Randall Woods in Santiago at rwoods13@bloomberg.net

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment