IOF will be charged again this Friday, making loans more expensive. See the impact



RIO – The government has anticipated the end of the collection of the Financial Transaction Tax (IOF) and from this Friday the tax will again apply to all credit transactions, including overdrafts and the revolving credit card.

The measure taken by the government to pay for the electricity bill exemption in Amapá will make new loans more expensive. The IOF rate is 3%.

In April this year, the government set the IOF tax on credit transactions to zero to mitigate the impact of the pandemic on the economy. The exemption runs until December, but expires today.

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So, whoever takes out a loan or rolls over the credit card bill will pay federal taxes in addition to the fees and interest charged by the financial institution.

– Let’s assume the bank charges 2% interest per month to borrow money. This percentage is not the effective cost, as it only represents the institution’s collection, without the impact of the IOF. With the tax refund, the effective rate of the operation tends to increase, making this borrowing more expensive – explains Alexandre Espirito Santo, chief economist at Órama.

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Virginia Prestes, professor of finance at the Armando Álvares Penteado Foundation (Faap), adds that the return of the IOF collection requires more planning when taking credit:

– Without the impact of the IOF, it was “cheaper” to take out a loan. Now the cost of taking out credit will increase. The government needs to fund itself to provide some relief in the public bills, but the measure may have surprised many people, especially those who planned to borrow at the end of the year to consume, in the case of individuals, or to expand sales. entrepreneurship.

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However, in terms of investments, the federal measure passed in April had no impact. The IOF charged on the returns of some products, such as fixed income investments, continued to follow the same regressive logic, with interest rates falling as the money was invested.

The suspension of the IOF also did not affect international purchases. The rate of 6.38% on purchases abroad (physical or on websites in other countries) continued with a credit card.


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