Tax burden should reach record 33.9% of GDP in 2021, estimates Treasury

The Brazilian tax burden rose from 31.77% of the Gross Domestic Product (GDP) in 2020 to 33.90% in 2021, the highest level in the historical series started in 2010, a movement driven by a reduction in tax benefits and the resumption of sectors economy, estimated the National Treasury in a report presented this Monday (4th).

“The result was influenced by the reversal of tax incentives granted during the Covid-19 pandemic and by economic growth in 2021 based on the resumption of sectors such as commerce and services”, said the Treasury.

The largest share of the country’s tax burden is attributable to the federal government, with 22.48% of GDP in 2021, an increase of 1.53% compared to the previous year.

The states accounted for a share equivalent to 9.09% of GDP, up 0.55% in the year. Municipal governments accounted for 2.33% of GDP, growth of 0.06%.

The Treasury estimated that the total tax burden in the three spheres of government totaled BRL 2.943 trillion last year. The agency considered that the official data is the responsibility of the Federal Revenue, which has not yet released the survey for 2021.

In the breakdown by type of tax, the estimate shows that federal revenue increased by 0.78% of GDP due to corporate income tax, in addition to 0.26% of CSLL (Social Contribution on Net Income).

A gain of 0.27% came from the IOF (Tax on Financial Operations), due to the end of the tax exemption that had been adopted during the most acute phase of the pandemic.

In 2021, the federal government’s collection had a real increase of 17.36%, to R$ 1.879 trillion, according to Revenue data, the best performance of the historical series started in 1995.

In relation to the states, the increase in the load was basically motivated by a gain of 0.58% in ICMS (Tax on the Circulation of Goods and Services). In the municipalities, the increase of 0.06% came from the ISS (Tax on Services of Any Nature).