Brazil to extend tax breaks on home appliances-report

Sat Jun 20, 2009 1:58pm EDT
BRASILIA, June 20 (Reuters) - Brazil's government will extend tax breaks on home-appliance goods at least until October, local media reported on Saturday.
The government will announce the extension of tax breaks on refrigerators, stoves and washing machines in the second week of July, when the current tax breaks expire, O Estado de S. Paulo newspaper reported, citing a source close to President Luiz Inacio Lula da Silva.
Finance Minister Guido Mantega said on Thursday the government would continue to use public banks to boost credit in the financial system to stoke growth.
Also this week, Planning Minister Paulo Bernardo said the government may have to slash spending in the federal budget to make up for a massive drop in tax revenue this year.
Tax revenues fell for a seventh straight month in May as growth in Latin America's biggest economy slumped.
Part of the decline in revenue was from tax breaks given to automakers and home-appliance manufacturers and incentives on construction materials as the government sought to lift the economy from a recession. Brazil's economy fell 0.8 percent in the first quarter of this year after a 3.6 percent plunge in the fourth quarter of 2008. (Reporting by Ana Nicolaci da Costa; editing by Mohammad Zargham)