BRASILIA, July 18 (Reuters) - Brazil's government is considering changes to the taxation of closed-end funds and shareholder payouts in order to shore up revenue in next year's budget, said three senior economic officials with direct knowledge of the matter.
The government signaled on Tuesday it would propose a comprehensive income tax reform only after the Senate has passed a consumption tax reform that cleared the lower house of Congress this month.
A more complex and structural reform, involving income tax exemptions, taxation of profits and dividends and reductions to payroll taxes, would be presented after the consumption tax reform clears the Senate, the sources said.
"When the budget bill is sent, revenue measures to meet the targets must also be sent, and some of these measures will already appear in the proposal," said one of the sources.
Closed-end funds offer favorable investment opportunities to wealthier Brazilians by taxing earnings only when they are distributed to investors.
Persons:
Marcela Ayres, Bernardo Caram, Brad Haynes, Matthew Lewis, Richard Chang
Organizations:
Finance Ministry, Finance, Senate, Thomson
Locations:
BRASILIA, Brasilia