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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: David Petty who wrote (11250)	1/6/1999 3:59:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Brazil's Senate OKs CPMF Tax Measure In 1st Round Vote Dow Jones Newswires BRASILIA -- The Brazilian Senate Wednesday approved by 61 votes to 19 the first reading of the extension and increase of the CPMF financial transactions tax for the next three years. The measure - calculated to save the government 15 billion reals (BRR) ($1=BRR1.120) in 1999 - is considered a key measure of the government's fiscal stability plan, directly linked to the $41 billion international aid package for Brazil. Senate chairman Antonio Carlos Magalhaes announced after the vote that the second-round vote in the upper house will be held Jan. 19, after which the proposal will go to the Chamber of Deputies for another two voting rounds. The first-round government victory in the Senate is also the first decision by Congress in the extraordinary session of the legislature during January, when parliament is normally in recess. The constitutional amendment seeks to extend the CPMF tax - which expires as a temporary levy Jan. 23 - to the year 2001, simultaneously increasing its rate to 0.38% from the current 0.20% for the next 12 months, and then lowering it to 0.30% in 2000 and 2001. The CPMF, charged on all banking transactions, was first introduced two years ago and aims to raise funds to finance health services. Opposition legislators claim the revenue isn't used for its orginal purpose but rather for stop-gap budget shortcomings as a whole. Because of Congress' failure to approve the amendment last year, the government announced a "mini-package" at the beginning of this month, including new tax raises to offset the estimated BRR5.4 billion in loss of revenue due to the delay of the CPMF approval. New taxes in Brazil only become effective 90 days after their approval by Congress. -By William Vanvolsem; (5561) 244 3095; wvanvolsem@ap.org