EMERGING MARKETS-Brazil's real rises as BRICS meets, Lula supports Argentina joining bloc

* Brazil's federal tax revenue falls in July, worst drop this year * Inflation battle still not won, says Brazil's Campos Neto * Brazil's Lula in favor of Argentina joining BRICS bloc * Mexico says it won't modify decree on GM corn ahead of USMCA panel * Latam FX up 0.8%, stocks add 0.9% By Bansari Mayur Kamdar Aug 22 (Reuters) - The Brazilian real rose against the dollar on Tuesday as BRICS leaders kicked off a summit in Johannesburg, with Brazilian President Luiz Inacio Lula da Silva saying he is in favor of embattled neighbor Argentina joining the bloc. The real gained 0.8% against the dollar. Finance Minister Fernando Haddad said a tax reform that will restructure Brazil's complex consumption taxes - a key step in Lula's plan to boost economic growth - will be finalised this year. Brazil's federal tax revenue experienced in July its biggest monthly decline this year, underscoring challenges for the government seeking to improve public accounts. Central bank Governor Roberto Campos Neto reiterated that Brazil's battle against inflation has yet to be won, noting that interest rates need to remain in restrictive territory for the time being. Stocks in Brazil rallied 1.0%, leading regional gains, and were up 5% so far this year. Leaders of the BRICS nations - Brazil, Russia, India, China and South Africa - converged on Johannesburg for a summit where they will weigh expanding the bloc as some members push to forge it into a counterweight to the West. Lula said he wanted Argentina to join the BRICS group, as Brazil's neighbor struggles with a lack of foreign reserves. Argentina's peso strengthened to 710 per dollar in black market. Argentine Economy Minister Sergio Massa is set to meet U.S. Treasury officials Jay Shambaugh and Michael Kaplan in Washington later in the day. Massa will also meet World Bank and Inter-American Development Bank officials on a trip focused on the latest IMF's programme reviews, which will be addressed by the Fund's executive board on Wednesday. "Prospects of a (Javier) Milei victory will accelerate the ongoing dollarization process and inflation dynamics, making implementation of the program in the remainder of the year extremely challenging," said Eurasia Group's Daniel Kerner and Luciano Sigalov in a note. "In this context, extra resources for Massa to intervene in FX markets look highly unlikely." Currencies of top copper producers Chile and Peru benefited from strong copper prices after firm consumption data in China and more Chinese monetary support measures. The Mexican peso gained 0.5% against the dollar. Mexico won't make any further changes to a decree on genetically modified (GM) corn ahead of a dispute settlement panel requested by the United States through the USMCA trade pact, said economy minister Raquel Buenrostro. Colombia's peso slipped 0.5%. Elsewhere, Zambia's senior treasury official Felix Nkulukusa said the government is still negotiating a memorandum of understanding on debt restructuring with its official creditor committee. Pakistan's rupee closed at a record low of 299 rupees against the dollar in the interbank market following an easing in import restrictions that has lifted demand for the dollar. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 965.38 0.58 MSCI LatAm 2355.12 0.92 Brazil Bovespa 115481.31 0.92 Mexico IPC 53116.66 0.01 Chile IPSA 6126.50 0.04 Argentina MerVal 580112.50 -0.716 Colombia COLCAP 1130.78 -0.17 Currencies Latest Daily % change Brazil real 4.9392 0.78 Mexico peso 16.9392 0.48 Chile peso 866.2 0.43 Colombia peso 4121.64 -0.39 Peru sol 3.7319 -0.48 Argentina peso (interbank) 350.0000 0.00 Argentina peso (parallel) 710 1.41 (Reporting by Bansari Mayur Kamdar in Bengaluru Editing by Alistair Bell)