BRASILIA, April 29 (Reuters) - The Brazilian government will raise taxes on beers, sodas and other beverages in a move that will raise an extra 1.5 billion reais ($674 million) in revenue to help meet its elusive fiscal savings goal.
The tax agency said late on Tuesday that a new survey showed an increase in the average price of many cold beverages, which means the government can charge higher taxes on those products.
Earlier this month, the government had already announced a tax hike on beer to bolster fiscal accounts that have been hit hard over the last three years by rising subsidies, higher spending and an economic slowdown.
The rapid erosion of the country’s finances led Standard & Poor’s to cut Brazil’s debt rating closer to junk status in March.
President Dilma Rousseff has promised to rein in spending and hike some taxes to improve the fiscal accounts, but many economists say rising energy subsidies will make it very difficult for the government meet its savings target this year.
Rousseff set a primary budget surplus goal equivalent to 1.9 percent of GDP this year, the lowest target since Rousseff took office in 2011. The primary surplus, or excess revenue prior to debt interest payments, is considered a key gauge of a country ability to repay its debt.
Shrinking primary surpluses have raised the country’s overall budget deficit, which includes interest payments, to a three-year high of 3.26 percent of GDP last year. In 2012, the deficit was 2.48 percent of GDP.
The widening deficit and increased debt servicing costs have left limited room in the budget to bolster public investment at a time when the economy is struggling to take off.
The tax agency’s chief Carlos Alberto Barreto said in a statement that he hopes that companies refrain from passing the tax increase on to consumers.
The government and central bank are struggling to ease inflation, which is approaching the 6.5 percent ceiling of the official target range. ($1 = 2.2259 Brazilian reals) (Reporting by Alonso Soto)