Brasília, September 21 (Reuters) – Brazilian President Jair Bolsonaro on Wednesday approved an interim measure to exempt foreign investors from paying tax on profits derived from investments in private securities, according to a statement from his office.
Tax exemption will be granted for capital gains on fixed income securities issued by corporations and banks, such as debentures and bonds.
Foreigners currently pay a 15% capital gains tax on local private sector bonds, but are exempt from this tax when investing in the Brazilian stock market and government debt.
According to the government, the measure will increase demand from foreign investors, helping to bring funds into the country and reducing financing costs for local businesses.
The government said the measure would result in foregone tax revenue of 1.3 billion reais ($251 million) in 2023, 1.4 billion reais in 2024 and 1.6 billion reais in 2025.
The measure, effective from Wednesday on a temporary basis, requires congressional approval to become permanent.
($1 = 5.1716 reais)
(Reporting by Bernardo Caram; Editing by Kenneth Maxwell)
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