Brazil plans tax hikes to help power distributors
BRASILIA, March 25 (Reuters) - Brazil plans to hike taxes on some imports and consumer goods to raise around 4 billion reais ($1.73 billion) to help the country's struggling electricity distributors, a government official said on Tuesday.
Earlier this month the government pledged an extra 4 billion reais to help energy distributors paying record-high electricity prices after a severe drought curbed hydro-electric output.
With an increase in subsidies and a drop in tax revenues eroding the country's finances, Standard & Poor's cut Brazil's debt rating on Monday, a major blow to President Dilma Rousseff as she prepares to run for re-election in October.
Her administration has promised to rein in spending, but economists say rising energy subsidies will make it difficult for the government to meet its fiscal savings goal this year.
The country's federal tax agency deputy chief Luiz Fernando Teixeira said the government is studying raising taxes on beer, sodas and other drinks as well as cosmetics and some imported goods to come up with extra revenue.
The federal government collected 83.13 billion reais in taxes in February, official data showed earlier on Tuesday, up 3.44 percent from the previous year, but below market expectations for an intake of 86 billion reais. ($1 = 2.3092 Brazilian reals) (Reporting by Luciana Otoni; writing by Alonso Soto; editing by Andrew Hay)
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