BRASILIA, Sept 23 (Reuters) - Brazil’s federal government collected less in taxes in August than expected, the latest disappointing result that highlights the administration’s struggles to meet a key fiscal savings goal.
Federal tax revenues reached 94.378 billion reais ($39.25 billion) last month, the country’s tax agency said on Tuesday, below the 97 billion reais forecast by nine economists in a Reuters poll.
In the first eight months of the year, federal tax revenues amounted to 771.788 billion reais, up just 0.64 percent in real terms compared to the same period of 2013. The government collected 7.1 billion reais, or about half of what it expected in August from a tax settlement program, in which companies settle back taxes under dispute.
The tax agency cut its 2014 federal tax revenues growth estimate to 1 percent in real terms from its original estimate of 2 percent.
Stagnant tax revenue due to a sluggish economy has forced the government to tap 3.5 billion reais from a sovereign wealth fund and ask for 1.5 billion reais in dividends from state-owned companies in an effort to meet its 2014 primary surplus target.
Many economists say those transfers are part of the accounting maneuvers used by President Dilma Rousseff over the last three years that have hurt investors’ confidence in Brazil’s fiscal discipline.
Finance Minister Guido Mantega earlier on Tuesday said such use of the sovereign funds is a legitimate practice.
The health of the country’s finances has turned into a hot topic in the campaign ahead of October presidential elections.
Since 2012 the country has seen its primary surplus, or savings before debt payments, shrink as a weak economy and ineffective industrial tax breaks have weighed on revenue.
As part of efforts to meet its fiscal goal, the government also reduced its planned loan to struggling energy distributors by 4 billion reais this year. It also pledged to cut 2.2 billion reais in spending on personnel.
Despite the extra revenue and spending cuts, many experts believe the government will not be able to meet its primary surplus target of 99 billion reais, or about 1.9 percent of GDP.
Treasury chief Arno Augustin told Reuters on Sept. 12 that the government was assessing whether to reduce the target as tax revenues came in worse than expected.
$1 = 2.40 Brazilian reais Reporting by Luciana Otoni; Writing by Alonso Soto; Editing by Chizu Nomiyama