SAO PAULO (Reuters) – Brazil’s government late on Thursday published an executive order that effectively rolls out a minimum 15% tax on profits of multinational corporations, a publication in the country’s official gazette showed.

WHY IT’S IMPORTANT

Brazil’s government has been seeking new sources of revenue to meet fiscal targets that include reducing its fiscal deficit to zero, while being loath to adopt broad spending cuts. It says the new move is in line with global efforts to combat tax evasion.

DETAILS

The executive order sets an additional levy on Brazil’s social contribution tax on corporate income (CSLL) to make sure the minimum taxation stands at 15%, according to the publication.

Brazilian officials had previously said the move was being considered both as a way to align the country with tax discussions it has been addressing as chair of the G20 and to ensure that the 2025 fiscal goal is met.

KEY QUOTE

The move comes as Brazil “adapts to the Global Anti-Base Erosion Rules (GloBE Rules) elaborated by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting,” the order signed by President Luiz Inacio Lula da Silva said.

ADDITIONAL BACKGROUND

Brazil’s Finance Ministry did not immediately detail how much it expects to collect in additional tax revenue following the move. Government officials will hold a press conference on the topic later on Friday, the ministry said.

Executive orders in Brazil have immediate validity but must be endorsed by lawmakers within four months or they expire.

(Reporting by Gabriel Araujo; Editing by Hugh Lawson)