CORRECTED-OFFICIAL-Brazil to start taxing savings accounts

(Finance ministry corrects level below which Selic rate must fall for savings accounts to start being taxed to 10.5 percent from 10.25 percent, paragraph 3)

BRASILIA, May 13 (Reuters) - Brazil will begin charging income tax in 2010 on savings accounts with deposits of more than 50,000 reais (about $24,000) to avoid a flight from government bonds and allow for interest rates to fall further, Finance Minister Guido Mantega said on Wednesday.

With the central bank's benchmark interest rate at an all-time low and likely to fall further, the government is trying to prevent an exodus from higher-yielding government bonds to tax-free savings accounts.

A migration away from domestic bonds could make it difficult for the government to finance the national debt.

The measure will only take effect if the so-called Selic rate remains below 10.5 percent, Mantega said. If the rate falls below its current level of 10.25 percent in 2009, the government will reduce taxes on investments in domestic bonds for the rest of the year to discourage investors from switching to savings accounts, he added. ($1=2.09 reais) (Reporting by Isabel Versiani; Writing by Ana Nicolaci da Costa and Todd Benson; Editing by James Dalgleish)