* Brazil tax reform unlikely to pass, lawmaker says * Citi sees Brazil"s real trading at 5.32 by year-end * Mexican, Colombian peso hit by tumbling oil prices * Peruvian sol up as Las Bambas mine roadblock lifted (Adds analyst comments, updates prices throughout) By Susan Mathew and Shreyashi Sanyal Aug 19 (Reuters) - Latin American currencies fell on Thursday as the dollar retained its strength following U.S. Federal Reserve minutes that suggested stimulus tapering may start this year, while Brazil"s real eased away from session lows. The real hit more than three-month lows earlier in the session, and was last trading at 5.4177 to the dollar, with gathering political and fiscal headwinds weighing on the currency. The deputy speaker of Brazil"s lower house of Congress, Marcelo Ramos, said an income tax proposal that would introduce a 20% tax on company dividends is unlikely to pass. Ramos also noted the apparent abandonment of fiscal austerity policies in the country due to President Jair Bolsonaro"s focus on increasing spending to win re-election next year as his popularity tumbles. "The likelihood of passing a bill with a decrease of tax collection is increasing," strategists at Citi said. They also noted rising power generation costs on top of already-existing fiscal risks related to the increase of boosted cash-transfer social programs. These could impact inflation as growth expectations, they said. But they see the real trading at 5.32 per dollar by year-end on rising commodity prices and a weak currency resulting in a robust trade surplus in 2021. Brazil stocks rose 0.6%, snapping a three-day losing streak after hitting near five-month lows earlier in the session. Brazilian prosecutors asked a bankruptcy court on Wednesday to compel miners Vale and BHP Group to fully pay off their Samarco joint venture"s 50.7 billion reais ($9.47 billion) debt. Oil major Petrobras weakened 0.7% following a decline in crude prices. This also saw currencies of crude exporters Mexico and Colombia drop around 0.7% and 0.3% respectively. Mexico created a new debt instrument known as "Bonde F," a development bond, Deputy Finance Minister Gabriel Yorio said on Wednesday. Mexican stocks were set for their worst session in three weeks, while MSCI"s index of Latam stocks hit April lows as stocks were knocked by growth and U.S. stimulus tapering worries. "The latest tumble in emerging market (EM) equities, following the tapering discussion in yesterday"s FOMC minutes, adds to what has been a relatively poor year for them so far," said Thomas Mathews, markets economist at Capital Economics. "We don"t expect EM equities, as a whole, to rack up big gains over the next few years thanks in part to the spillovers of lower growth in China," Mathews added. Peru"s sol bucked the gloom, rising 0.3% as residents near the Las Bambas copper mine in the Peruvian Andes lifted the blockade of a road used to transport the red metal after receiving overtures from President Pedro Castillo"s new government. Peru is the world"s second-biggest copper producer. Key Latin American stock indexes and currencies at 1547 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1231.48 -2.39 MSCI LatAm 2357.41 -2.03 Brazil Bovespa 117360.32 0.62 Mexico IPC 51164.41 -1.58 Chile IPSA 4310.20 -0.73 Argentina MerVal 66143.14 -1.418 Colombia COLCAP 1325.52 -0.03 Currencies Latest Daily % change Brazil real 5.4182 -0.83 Mexico peso 20.1710 -0.64 Chile peso 786.5 0.08 Colombia peso 3867 -0.50 Peru sol 4.0937 -0.23 Argentina peso (interbank) 97.2800 -0.02 Argentina peso (parallel) 178.5 1.96 (Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru; Editing by Marguerita Choy and Will Dunham) Our Standards: The Thomson Reuters Trust Principles.