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Brazil cuts taxes to spur growth


Brasilia : Brazil’s finance minister announced Thursday a series of tax cuts aimed at ensuring economic growth of 5 percent in 2012 and shielding the country from the global financial crisis.

“There’s a very complicated situation in the world and several economies are treading water,” Guido Mantega told a press conference, vowing that the Brazilian government “will not allow this crisis to contaminate the national economy”, which is forecast to grow 3 percent this year.

The measures include lower taxes on stoves, refrigerators, washing machines and other appliances, reduced levies for the construction industry to spur public housing programmes and the elimination of a tax on bread and pastas.

Mantega also said that beginning Thursday the tax on personal loans will fall from 3 percent to 2.5 percent per year and the tax on foreign purchases of Brazilian stocks and corporate bonds will drop to zero.

According to the minister, these measures will enable Latin America’s biggest economy to continue to grow safely and without risk of overheating.

“We’re taking steps to ensure the domestic market (remains) strong and dynamic,” Mantega said, adding that the government will continue to promote public and private investment to “guarantee employment”.

The minister noted that Brazil’s unemployment rate of 5.8 percent is one of the world’s lowest and that 1.8 million new jobs were created this year.

“Next year will bring (more of the same) and that will mean an increase in payroll that will support the Brazilian economy’s virtuous cycle” in 2012, Mantega said.