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Cash withdrawals and debit card payments abroad are subject to the same IOF tax.

The tax also increased for purchases of traveler's checks and for loading prepaid cards made outside the country. The rate went from 0,38% to 6,38%.

Brasilia - Brazilian spending on international travel is increasing. According to the Central Bank, Brazilian spending abroad reached US$1,923 billion in August, higher than the result for the same month last year (US$1,913 billion) (Photo: Leonardo Attuch)
Kelly Oliveira

Reporter from Agência Brasil

Brasilia – Finance Minister Guido Mantega said today (3) that there will be no increase in the Tax on Financial Operations (IOF) for the purchase of foreign currency in cash. At the end of last year, the government announced an increase in the IOF for travelers who withdraw foreign currency or use debit cards abroad.

The tax also went up for purchases of traveler's checks. traveler's checks - and for loading prepaid cards made outside the country. A IOF rate The rate increased from 0,38% to 6,38% in these cases. For the purchase of foreign currency, the rate remained at 0,38%.

According to the minister, the measure was adopted because the Brazilian spending Taxes abroad are very high. Mantega said the tax is "regulatory," aimed at preventing "excesses." "There is no basis for thinking that we are going to extend the IOF tax to foreign exchange transactions," he assured. 

Regarding the devaluation of the real against the dollar at the beginning of 2014, Mantega said that "it is in line with other currencies." According to the minister, this happened in Brazil and other countries due to the appreciation of US Treasury bonds. TreasurysHe added that the dollar The exchange rate is fluctuating and has already retreated from the R$2,40 level in Brazil. Mantega also said that the Brazilian exchange market is "more liquid [resources available] and sophisticated" than that of other countries.