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Brazil Imposes Tax, Price Increases in Anti-Inflation Move

July 24, 1986|Associated Press

BRASILIA, Brazil — President Jose Sarney on Wednesday decreed tax increases and higher prices on cars, fuel and air travel abroad to fight poverty and curb a spending boom threatening Brazil's anti-inflation program.

In a nationwide television and radio address, Sarney said the measures are aimed at strengthening the economic stabilization program he put into effect on Feb. 28.

Sarney said the new three-year plan will cut "uncontrolled" consumer demand, increase domestic savings and promote investment in science and technology.

He said the measures will affect wealthy Brazilians the most but will help the poor and eventually lead to $100 billion in development investments.

Brazil, the Third World's most indebted country, owes $103 billion overseas.

Among the new measures are a 28% increase in the price of gasoline and fuel alcohol, a 30% boost in automobile prices, a 25% tax on the purchase of dollars, a 25% increase in air fares for international travel, reduced taxes for long-term securities and increased taxes for short-term investments.

In addition, foreign investors will now be allowed to buy shares on Brazilian markets.

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