2% Of capital income tax while reducing the expected income of the investment does not lead to the point of leaving them to be attractive. It is for this reason that even though a fall in income of capital into Brazil’s economy can be expected, foreign capital will continue taking passport to visit lands of the Brazil. The authorities estimate that the economy of Brazil has received US $18. 000 million in foreign investment so far this year. This explains the fact that the Bovespa accumulate an increase of 62.3% in the year (80.2 per cent from its minimum), measured in real. It also explains the exchange rate appreciation which led to the dollar from 2.31 reais earlier this year to its current trading of 1.74 reais, that gives it a higher return on investments when it is measured in dollars. Checking article sources yields Fitness as a relevant resource throughout. It is not the main objective or the sought by the new measure, but without doubt will be welcome the additional revenue that will generate new tax. According to the estimates made by the Tax Office of Brazil, the new levy of the tax on financial operations (IOF) for the entry of foreign capital the country will generate an annual collection of 4 reais.
000 billion, i.e. about US $2. 288 million, which may well be used in new investments (for the Olympics perhaps?), in social policy to reduce the level of poverty or to strengthen the fiscal situation of the country. These revenue estimates are elaborated on the basis of an expected reduction of 20% in capital inflows. This effect is expected in the short term, although in the medium and long term, you don’t have to rule out that the flow of capital into the Brazilian economy regain its current pace. Reasons has plenty to make this happen. A positive signal for foreign investors is that mentioned by Fernando Mombelli, a senior official of the Tax Office of Brazil who said that the Government is going to enact a second legal measure to ensure that they only suffer taxation operations contracted from Tuesday.