Brazil govt eyes sending income tax reform proposal to Congress
11:58 am Monday, July 10th, 2023
BRASILIA (Reuters) – President Luiz Inacio Lula da Silva’s government will not wait for Brazil’s Congress to finish voting on a tax reform related to consumption before submitting its proposal for an income tax reform, Finance Minister Fernando Haddad said on Monday.
Haddad said in an interview with podcast “O Assunto” that the planned change in income tax, a long-standing agenda item for Lula’s leftist Workers’ Party, represents a crucial element of the government’s plans to zero its primary budget deficit next year.
“I will need Congress to consider this second phase (of tax reform) along with the budget bill,” said Haddad, referring to the budget proposal that, by law, the government must submit by the end of August.
Brazil’s lower house last week approved a groundbreaking reform in consumption taxes, setting the stage for an overhaul of the current intricate and costly system that has eluded success for decades. The measure still requires final passage in the Senate, with no date yet set for a vote.
Haddad also said the government was crafting an ecological transition plan that has won positive feedback from Lula and could become the “flagship initiative” of his third non-consecutive term in office.
The plan encompassing more than 100 actions to be implemented over a four-year period, Haddad said, has been formulated following an evaluation of various possibilities including carbon credits, lithium exploration and rare earths.
According to Haddad, a carbon credit bill is set to be presented to Congress in August. Additionally, the government has scheduled an official presentation to attract companies interested in making products labeled as “clean energy,” Haddad said.
(This story has been corrected to change the picture)
(Reporting by Marcela Ayres; Editing by Mark Porter and Will Dunham)
