Brazil’s Congress approves new amnesty for undeclared assets abroad

Brazil’s Senate passed a bill on the 14th of March that reopens an amnesty for Brazilians to repatriate undeclared assets from abroad without prosecution, though they will have to pay 35 percent in tax and fines.

The 120-day repatriation window will open as soon as President Michel Temer signs the bill into law.

Temer’s government expects to collect 13.2 billion reais ($4.32 billion) in extra revenues from the new program that was decided on the success of an earlier amnesty last year that brought in 46.8 billion reais.

Those revenues helped Brazil’s authorities meet their primary budget deficit goal for 2016. The proceeds from the new amnesty will be shared with cash-strapped Brazilian states and municipal governments that are desperate for funds to pay salaries and suppliers.

The amnesty taps the desire of Brazilians who hold billions of dollars in off-shore assets to come clean with the tax man at a time of growing international uncertainty and the increasing exchange of tax information between governments.

The extra cash comes in handy in a country that has posted widening budget deficits for three straight years and whose government is struggling to restore fiscal discipline with unpopular austerity measures.

Critics say the amnesty allows holders of assets gained through graft to launder funds they stashed abroad at a time when prosecutors are investigating Brazil’s largest ever corruption scandal involving bribes and political kickbacks.

Source: Reuters Brazil