MercoPress. South Atlantic News Agency

Brazil's gov't wants the “super rich” to pay income tax on funds abroad

A worker who earns a low salary pays income tax and a millionaire does not, Haddad underlined

Brazil's Finance Minister Fernando Haddad said the federal government was considering additional taxes to the country's largest fortunes to “correct absurd things in the tax system,” it was reported. According to the former presidential candidate, the government wants to tax the “super rich” who have offshore funds or hold their investments in exclusive funds that currently do not pay income tax.

The measure seeks to meet the fiscal deficit goals for 2024, Haddad also explained. The minister also pointed out that current distortions make workers earning over R$ 2,650 (US$ 552) pay income tax, when the investment funds of the “superrich” do not.

“These exclusive investment funds never pay taxes and it is something that draws attention, for example, outside Brazil. A worker who earns a low salary for Income tax and a person who earns millions is exempt with this model,” Haddad underlined.

After the Lower House passed the tax reform bill, the government of Luiz Inácio Lula da Silva intends to increase the collection of taxes on the higher income sectors which are currently exempt.

“Does anyone believe that a Brazilian who is rich, has residence in Brazil and money abroad does not have to pay for the income of an offshore personal fund? Why? And the exclusive funds, in which a person delegates shares to his descendants and never pays income tax? These are things that draw the world's attention to Brazil,” Haddad told Folha de São Paulo.

“Congress, which will have the last word, knows: when there is a boom, there is something for everyone. Not now. Whoever does not support it will be faced with one more hungry person in Brazil,” Haddad insisted.