UPDATE 3-Brazil unveils $17 bln in taxes, spending cuts to plug deficit
(Adds comments from Congressional leaders, economists)
By Leonardo Goy
BRASILIA, Sept 14 (Reuters) - Brazil's government announced spending cuts and tax increases totaling 65 billion reais ($16.9 billion) on Monday as it scrambles to close a budget deficit that led to a downgrade of the country's credit rating last week.
The biggest item was the revival of the unpopular CPMF tax on financial transactions that will raise 32 billion reais next year if it passes a Congress opposed to new taxation.
The drastic cuts hit agricultural subsidies, infrastructure investments, government salaries and bonuses, as well as public health and low-cost housing programs.
The government reduced tax subsidies for the chemical industry, cut refunds to exporters of manufactured goods and raised the capital gains tax to up to 30 percent.
The latest round of fiscal measures are meant to bridge a shortfall of 30 billion reais in next year's budget that President Dilma Rousseff sent to Congress last month and reach a budget surplus of 0.7 percent of GDP before interest payments.
As Brazil slides into its worst recession since the Great Depression, opposition leaders said the steps were too little too late to restore credibility in the policies of Rousseff, who is facing mounting call for her resignation or impeachment.
Economists said the fiscal savings look good on paper but doubted they will clear Congress without being diluted. Continuación...