21 Jul 2017 | 04:32 PM UTC
Brazil: Government announces increase in fuel tax July 20
Government announces increase in fuel tax July 20; possible anti-government demonstrations
Event
On Thursday, July 20, the government announced that it will increase a tax on fuel to add a projected USD 3.3 billion (BRL 10.4 billion) to government revenue. The Finance and Planning Ministries also announced that they will freeze USD 1.9 billion (BRL 5.9 billion) more in federal spending for 2017. Both measures are intended to help balance the budget for 2017.
The tax increase will be imposed by executive order, bypassing the Brazilian legislative branch. Anti-government protests are possible in the coming days and weeks.
Context
President Michel Temer has implemented controversial austerity measures to reduce public debt and increase investor confidence. In 2015, Brazil’s sovereign debt was downgraded from its investment-grade rating due to a continuous budget deficit.
Despite Brazil’s economy contracting by over 3 percent each of the past two years, economists are projecting a 0.3 percent growth rate for 2017.
Advice
Individuals are advised to avoid all gatherings and protests due to the possibility of violence.
