Brazil's finance minister links potential IOF tax tweak to financial tax overhaul

FILE PHOTO: Brazil's Finance Minister Fernando Haddad speaks during a meeting to announce the submission of a bill to expand income tax exemptions to the National Congress at the Planalto Palace in Brasilia, Brazil, March 18, 2025. REUTERS/Adriano Machado/File Photo

(Reuters) -Brazil's Finance Minister Fernando Haddad said on Monday that any changes to a recent increase in the tax on financial transactions (IOF) would be tied to broader corrections of what he described as distortions in financial taxation.

The government last month hiked the IOF tax on some transactions to meet its fiscal targets, but the measure met with backlash and lawmakers signaled they could overturn it. Haddad suggested that discussion had opened the door to wider reforms.