Brazil's government plans to reduce taxes on long-term investments by private pension funds to boost their size and help economic growth, Finance Minister Antonio Palocci said on Friday.
The changes, which are part of a wider push by the government to cut certain taxes, aim to cut taxes on investment funds depending on their maturities. The longer the investment, the lower the tax.
Palocci said tax collection is rising thanks to accelerating economic growth. "That gives us the margin to continue working on adjusting taxes," he said.
Palocci said his ministry will send a provisional measure on the changes for President Luiz Inacio Lula da Silva's approval on Friday.
The moves will end a special tax regime for private pension funds, which was expected to raise 450 million reais ($150 million) for government coffers in 2005.
The maximum tax rate of 35 percent on investments by private funds should fall by five percentage points for every two-year extension of investments until it reaches a minimum rate of 10 percent.
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