(Adds details on tax measures)

By Marcela Ayres and Patricia Duarte

BRASILIA/SAO PAULO, March 15 (Reuters) - Brazil is considering possible tax increases, including a rise in the CIDE fuel tax and the IOF financial transactions levy, if forecasts this month suggest it may miss revenue targets, two sources briefed on the matter said on Wednesday.

Finance Minister Henrique Meirelles said on Wednesday that the center-right government expects to unveil new estimates for economic growth, tax revenues and spending this year as soon as March 22. Meirelles said the government would decide at that time whether tax increases were needed.

In a setback to the government, the Supreme Court ruled on Wednesday that the ICMS value-added tax should be excluded from the base for calculating the PIS/Cofins social security levy.

The ruling could cost the government tens of billions of reais in revenues if applied retroactively and force an increase in the rate of the PIS/Cofins tax, local media reported.

According to one of the government sources, who asked not to be identified because of the sensitivity of the information, there was concern that a rise in the rate of CIDE tax on fuel imports and sales could put pressure on inflation.

A sharp decline in recent months in inflation - which dipped below 5 percent in February - has allowed the central bank to press ahead with interest rate cuts, cited as one of the main factors driving an improvement in Brazil's economic climate this year.

Moody's Investors Service on Wednesday revised upward the outlook for Brazil's sovereign rating to stable from negative, saying Latin America's largest economy was poised to exit its deepest recession on record.

The sources said that another option being considered for raising revenues would be an increase in the Tax on Financial Operations (IOF) levied on foreign exchange and securities transactions.

The government believes a 1-2 percentage point increase in the IOF could lead to an increase in revenues of 4 billion to 5 billion reais. Currently, the tax stands at 1.1 percent for cash transactions and 6.38 percent for transactions by card.

Brazil posted a primary budget deficit, which excludes interest payments, of 156 billion reais last year and aims to reduce that to 143 billion reais this year as it seeks to restore its investment-grade credit rating.

The overall budget deficit, which includes interest payments, was 563 billion reais in 2016, equivalent to 9 percent of gross domestic product.

(Reporting by Marcela Ayres and Marcela Ayres; Writing by Guillermo Parra-Bernal and Daniel Flynn; Editing by Chizu Nomiyama and Leslie Adler)