Brazil slaps tax increase on overseas tourism spending

Brazil on Saturday imposed a hefty six percent increase on the surcharge paid by its citizens when making credit cards purchases overseas. The increase, which went into effect Saturday, raised the tax from 0.38 percent to 6.38 percent. The tax also applies to cash withdrawals from overseas bank machines and purchases made when using travelers checks. The announcement will come as a rude surprise to millions of Brazilians many of whom already have departed the country on their summer holiday travels. The measure is expected to add some 552 million reals ($205 million) to government coffers next year. The tax also aims to reduce the amount that Brazilians spend overseas, thereby bolstering domestic industry and reducing a budget deficit which the O Globo daily said stands at $72.7 billion. According to government figures, Brazilians spent $23.1 billion overseas between January and November of this year, a 14 percent increase over the same period in 2012.