June 23, 2020 / 6:42 PM / 14 days ago

UPDATE 1-Brazil federal tax revenue slumps to a 15-year low in May

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By Jamie McGeever

BRASILIA, June 23 (Reuters) - Brazil’s federal tax revenue slumped by almost a third in May to a 15-year low, the federal tax service said on Tuesday, reflecting the shock to economic activity from the quarantine and social isolation measures used to combat the COVID-19 pandemic.

The tax take of 77.4 billion reais ($15 billion) in May marked a decline of 32.9% in real terms from the same month last year, although it was more than the 69.9 billion reais forecast in a Reuters poll of economists.

It was the lowest monthly take since May 2005, highlighting the strain on public finances resulting from the crisis that will see government deficits and debts soar to record levels this year.

The government is forecasting a primary deficit this year excluding interest payments of around 700 billion reais, or just under 10% of gross domestic product, and a jump in overall debt to 93.5% of GDP.

Treasury Secretary Mansueto Almeida has said these forecasts may be too optimistic, given the severity of the economic crisis that is choking government revenues and prompting a surge in emergency spending.

The tax revenue service said the total tax take in the first five months of this year stood at 579.7 billion reais, down 11.9% in real terms from the same period last year. ($1 = 5.15 reais) (Reporting by Jamie McGeever; editing by Jonathan Oatis)

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