Latest news with #FernandoHaddad
Reuters
a day ago
- Business
- Reuters
Exclusive: Brazil government to defend bill cutting tax breaks by 10%, says sources
BRASILIA, June 5 (Reuters) - Brazil's government is expected to back a bill proposing a 10% cut to federal tax breaks as the main alternative to a controversial increase in the tax on financial transactions (IOF) proposed last month, two sources told Reuters on Thursday. The bill, which was proposed by lower house lawmaker Mauro Benevides, sets a 5% reduction in the value of tax benefits in 2025 and a further 5% cut in 2026, the proposal showed. The legislation also applies to fiscal and credit benefits. The tax cut breaks, however, will not include the Manaus free trade zone and non-profit entities, the proposal showed. Brazilian Finance Minister Fernando Haddad said earlier this week that the government would unveil a new set of fiscal measures next week aimed at balancing public accounts, with their approval seen as crucial to revisiting a controversial IOF tax hike. The bill that government is expect to support also blocks the concessions or the renewing of tax, credit and fiscal federal benefits.
Reuters
2 days ago
- Business
- Reuters
Brazil plans to cut tax breaks, curb education spending in fiscal package, say sources
BRASILIA, June 4 (Reuters) - Brazil's government is negotiating a package of fiscal measures with congressional leaders that includes cuts to tax exemptions and limits on the growth of transfers to an education fund, according to sources familiar with the talks. After initially signaling the measures would be unveiled on Tuesday, Finance Minister Fernando Haddad said they would be disclosed only after further discussions with party leaders on Sunday. First reported by local newspaper Valor Economico and confirmed by three government sources who requested anonymity, the package is being prepared as an alternative to the controversial hike in the financial transactions tax (IOF) announced last week, which drew broad backlash from lawmakers and business sectors. The plan focuses heavily on reducing tax benefits, a longstanding target of President Luiz Inacio Lula da Silva's leftist administration, said three sources. His economic team often criticizes the volume of tax exemptions that weaken public revenues, though previous attempts to roll them back have seen limited success in Congress. That includes a payroll tax break for companies, which remains in place without due compensation. One of the sources said the new package includes a proposed constitutional amendment that would establish rules to curb growth in transfers to the Fund for the Development of Basic Education. A similar initiative in last year's fiscal package was watered down by Congress, which blocked efforts to redirect more of the fund's resources to full-time education spending. The new measures aim to create fiscal space for the government to revise the recent IOF tax decree, which increased rates on a range of credit, foreign exchange, and pension transactions.
Straits Times
3 days ago
- Business
- Straits Times
Brazil ties potential IOF tax rollback to approval of new measures to be unveiled next week
Brazil ties potential IOF tax rollback to approval of new measures to be unveiled next week Brazil's government will unveil a new set of fiscal measures next week aimed at balancing public accounts, with their approval seen as crucial to revisiting a controversial IOF tax hike, said Finance Minister Fernando Haddad on Tuesday. Speaking to reporters after a lunch with President Luiz Inacio Lula da Silva, the heads of the lower house and Senate, and several cabinet ministers, Haddad said the government is holding off on disclosing the details to first align with congressional leaders, with a meeting expected on Sunday. Earlier, the minister had indicated that the measures could be unveiled after the meeting. "The idea is to submit the measures starting next week," he said. "We are being very careful because we depend on the votes of Congress." Negotiations follow intense backlash over a government decree that raised the financial transactions tax (IOF) on a range of credit, foreign exchange and private pension operations to increase public revenue, prompting lawmakers to mobilize to overturn it. Haddad, who earlier in the day said the episode had yielded the "best possible outcome" by bringing together the executive and legislative branches to pursue more structural solutions for fiscal balance, emphasized after the lunch he needed the approval of at least part of the new package to reassess the IOF hike. "The agreement is to present the measures and, if their legitimacy is recognized... I will have room to calibrate (the IOF)," he said. Haddad had previously indicated that the package was superior to the one presented at the end of last year, when the government projected 70 billion reais ($12.39 billion) in spending restraints through 2026. The minister also said the changes would likely involve submitting a constitutional amendment proposal, along with a bill and an executive order to Congress. On Monday, he emphasized that any changes to the IOF tax would be tied to broader corrections of what he described as distortions in financial taxation. Lula's government has said it aims to rebalance the federal budget by eliminating tax distortions and what it sees as unjustified tax benefits, rather than cutting spending, which has risen since he took office. However, several measures to curb tax incentives have been significantly watered down or ignored by Congress. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
4 days ago
- Business
- Yahoo
Brazil's finance minister links potential IOF tax tweak to financial tax overhaul
(Reuters) -Brazil's Finance Minister Fernando Haddad said on Monday that any changes to a recent increase in the tax on financial transactions (IOF) would be tied to broader corrections of what he described as distortions in financial taxation. The government last month hiked the IOF tax on some transactions to meet its fiscal targets, but the measure met with backlash and lawmakers signaled they could overturn it. Haddad suggested that discussion had opened the door to wider reforms. "If there's any adjustment, it will be part of a broader effort to correct existing imbalances in taxes related to finance," he said, without elaborating. "Beyond addressing the 2025 issue, (the aim is) to carry out a structural reform for the coming years," the minister added. Haddad said a government decision, aligned with Congress, would be made by Tuesday, before President Luiz Inacio Lula da Silva departs for an overseas trip. Lula's leftist administration tried last year to increase the social contribution tax on net corporate profits (CSLL) for financial institutions. However, the proposal was never voted on in Congress, and the government ultimately stopped counting on the nearly 15 billion reais ($2.63 billion) in extra revenue this year from the measure. Asked whether the government would propose changes to that tax again, Haddad said only that the measure was not overturned - it simply was never voted on. He later noted that raising that tax would require a 90-day waiting period before taking effect, making it less suitable for this year, which is well under way. Haddad said the heads of both chambers of Congress were involved in discussions about how to better calibrate taxation. "I believe we can provide a much more sustainable outlook, without resorting to stopgap measures that we know are not structural," he said. ($1 = 5.7061 reais)
The Star
4 days ago
- Business
- The Star
Brazil's finance minister links potential IOF tax tweak to financial tax overhaul
FILE PHOTO: Brazil's Finance Minister Fernando Haddad speaks during a meeting to announce the submission of a bill to expand income tax exemptions to the National Congress at the Planalto Palace in Brasilia, Brazil, March 18, 2025. REUTERS/Adriano Machado/File Photo (Reuters) -Brazil's Finance Minister Fernando Haddad said on Monday that any changes to a recent increase in the tax on financial transactions (IOF) would be tied to broader corrections of what he described as distortions in financial taxation. The government last month hiked the IOF tax on some transactions to meet its fiscal targets, but the measure met with backlash and lawmakers signaled they could overturn it. Haddad suggested that discussion had opened the door to wider reforms. "If there's any adjustment, it will be part of a broader effort to correct existing imbalances in taxes related to finance," he said, without elaborating. "Beyond addressing the 2025 issue, (the aim is) to carry out a structural reform for the coming years," the minister added. Haddad said a government decision, aligned with Congress, would be made by Tuesday, before President Luiz Inacio Lula da Silva departs for an overseas trip. Lula's leftist administration tried last year to increase the social contribution tax on net corporate profits (CSLL) for financial institutions. However, the proposal was never voted on in Congress, and the government ultimately stopped counting on the nearly 15 billion reais ($2.63 billion) in extra revenue this year from the measure. Asked whether the government would propose changes to that tax again, Haddad said only that the measure was not overturned - it simply was never voted on. He later noted that raising that tax would require a 90-day waiting period before taking effect, making it less suitable for this year, which is well under way. Haddad said the heads of both chambers of Congress were involved in discussions about how to better calibrate taxation. "I believe we can provide a much more sustainable outlook, without resorting to stopgap measures that we know are not structural," he said. ($1 = 5.7061 reais) (Reporting by Gabriel Araujo and Eduardo Simoes in Sao Paulo, Marcela Ayres in BrasiliaEditing by Rod Nickel)
