July 19, 2017 / 2:20 PM / a year ago

UPDATE 1-Brazil tax revenues rise in June ahead of budget revision

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BRASILIA, July 19 (Reuters) - Brazil’s federal tax revenues rose in June, data showed on Wednesday, a small respite for policymakers struggling to meet this year’s budget target amid a slow economic recovery.

Federal tax collection rose 3 percent from the same month a year ago after adjusting for inflation, to 104.1 billion reais ($33.1 billion), the country’s tax agency said. Tax revenue rose 0.8 percent in the first half of 2017 compared with a year before.

Tax collection rose in part due to a recent increase in job creation. As the economy created a net 67,358 new jobs in the first half of the year, revenues from the income tax on workers rose 9 percent in June from a year ago, the agency said.

However, June’s rise in tax revenues may not be enough to allow President Michel Temer’s administration to reduce a planned spending freeze of 39 billion reais for 2017.

Proposed changes in Congress to a tax debt amnesty program, if confirmed, would also cause a “significant” reduction in estimates for tax collection this year, Finance Minister Henrique Meirelles said last week.

Although the official deadline for the bimonthly budget revision is July 22, policymakers could make an official announcement on whether they will unfreeze spending or raise taxes as soon as Thursday. The government is aiming for a budget deficit of 139 billion reais this year before interest payments. ($1 = 3.15 reais) (Reporting by Silvio Cascione and Marcela Ayres; Editing by Jonathan Oatis)

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