The federal collection of BRL 202.588 billion between the collection of taxes and contributions in July was better than expected for the month, according to economists. In their assessment, the performance in the year has been reflecting a strengthening of the labor market and resilience of the country’s economic activity.
For Rafaela Vitoria, chief economist at Inter, the stronger-than-expected growth of the economy is the main factor behind this more robust collection.
“A highlight is the improvement in the job market, which is already reflected in higher pension and income tax revenues. We can also assess that there is even room for correction of the income tax table next year”, he pointed out.
Tiago Sbardelotto, economist at XP, said that the result surprised when it was released above the market consensus (R$ 201.9 billion) and the XP projection (R$ 201.7 billion).
“July figures were highly supported by revenues linked to corporate earnings, which rose 17.5% in real terms compared to the same month a year ago. This is due to the 10.9% growth in monthly collection by estimate and 52.1% in the quarterly balance sheet collection”, highlighted Sbardelotto.
“In the accumulated result for the year, the increase in tax collection was supported by the IRPJ and CSLL, which rose 20.8% in real terms. This result is largely due to the collection related to the annual income tax adjustment declaration, that is, it stems from last year’s generating events, and from atypical collections that add up to R$ 30 billion linked to companies in the commodities sector” , he added.
The economist also said that tax collection should continue on a positive trajectory until the end of the year, and highlighted XP’s annual expectation of a total collection of R$ 2,183 billion, with an upward bias.
On the other hand, despite the consensus that the 2022 collection ends up positive, the 2023 collection remains an unknown.
Murilo Viana, a specialist in public finance, declared that the collection performance is surprising, but the discussion turns to how much this growth is sustainable.
“Performance has been positive, and some factors influence this result. First, we started the year with very low market expectations, different from the current perspective of closing the year with growth of around 2%. The activities proved to be resilient, the service sector responded better than expected and the performance of commodities has been good, this generates economic growth and greater collection”, highlighted Viana.
“However, the government has taken a series of tax relief measures, to cut taxes, and then there is a discussion whether it is structural or conjunctural. If it is structural, we can expect good collection results for next year as well, but there are strong indications that this performance comes from a series of conjunctural factors, as in the case of commodities themselves, which are volatile”, he concluded.
Source: CNN Brasil
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