Author: Juliana Rocha

Source: Gazeta Mercantil, 19/07/2007

Brasília, July 19, 2007 – The biggest contribution came from the IRPF, with an increase of 31,7% and an accumulated total of R$ 6,9 billion. Yesterday, the Federal Revenue announced a new collection record in the first half of this year. From January to June, R$ 282,4 billion were spent, 10% more than in the first six months of 2006, already discounting the inflation measured by the IPCA. For the government, the economic growth in the period stimulated the result.

In June, collections totaled R$ 49 billion, a real growth of 6,22% in relation to the sixth month of 2006 and 7,7% in comparison with May of this year.
The main contribution to the increase in government revenue in the first half was from the Individual Income Tax (IRPF), whose collection grew 31,7% and totaled R$ 6,9 billion. The improvement in the profitability of companies and the payment of import taxes also contributed to the new record.

CPMF collection in the period was R$ 17,4 billion, 11,32% higher than in the first six months of 2006, after discounting inflation.

The increase in government revenue is a constant target of criticism from businessmen, who ask for a reduction in the tax burden and the approval of a tax reform. The load had a new high last year. It rose from 33,7% of GDP (Gross Domestic Product) in 2005 to 34,5% of GDP in 2006.

According to the Minister of Finance, Guido Mantega, businessman Antoninho Marmo Trevisan, president of the thematic group on Tax Reform at the Council for Economic and Social Development (CDES), defended on Monday that the government should take advantage of the positive situation of growth in the Domestic Product Gross (GDP) to pressure parliamentarians to approve the Tax Reform.

The general coordinator of Forecast and Analysis of the Federal Revenue, Raimundo Eloi, explained that the growth of the industry, mainly in the automotive sector, and of the salary mass were fundamental in the growth of the collection in the first semester of the year.

In addition to the IRPF, social security revenue rose 11,46% in the first half, to R$ 70,1 billion, also influenced by the growth in the wage bill.
'From the collection of Corporate Income Tax, we noticed that the profitability of companies increased last year compared to 2005', added Eloi.

The tax is paid to Revenue until March of the following year and, therefore, appears in the collection for the first semester. The IRPJ amounted to R$ 34,8 billion in the first half of the year, a real increase of 13,98% in relation to the same previous period.
Because of the increase in imports ? stimulated by the devaluation of the dollar in the first semester ? IPI payments totaled R$ 15,1 billion in the first half of the year, 12,8% more than in the first six months of 2006, after discounting inflation.

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The IPI linked to imports was R$ 3,4 billion, 21,4% higher than in the same period last year.

The auto sector was the industry's biggest highlight in the first half of the year. The payment of IPI in the automotive sector added up to R$ 2,2 billion, 10,14% more than in the first six months of 2006, after discounting inflation.

The payment of PIS/Pasep and Cofins contributions by the automobile industry increased by 26,83%.

The chief economist of the Federation of Industries of Rio de Janeiro (Firjan), Luciana de Sá, agrees that the combination of increased revenue and economic growth creates the ideal environment for the approval of the Tax Reform.

But he defends the approval of a project that includes the end of the CPMF and the Untying of Union Revenues (DRU). The Federation of Industries of the State of São Paulo (Fiesp) joins the chorus for the end of the check tax.

kicker: The improvement in the profitability of companies and import taxes also collaborated