BRASILIA, June 11 (Reuters) – Brazil’s Finance Minister, Fernando Haddad, urged lawmakers on Wednesday to support key economic measures currently under review in Congress. These measures are seen as vital to sustaining the ongoing growth cycle in Latin America’s largest economy. Haddad’s comments came during a hearing in the lower house of Congress, following resistance from some lawmakers to the government’s proposal to roll back a controversial tax increase on certain financial transactions. Speaker Hugo Motta had earlier highlighted this resistance.
On Sunday, Haddad suggested compensating for the revenue loss from the scaled-back financial transactions tax by increasing taxes on online betting, private credit instruments, and financial institutions. Motta emphasized in a post on the X social media platform that merely raising revenue without cutting spending is not a viable solution.
During the hearing, Haddad pointed out that under leftist President Luiz Inacio Lula da Silva’s administration, Brazil has achieved an average annual economic growth of 3%. He stressed the importance of advancing with economic measures in Congress to ensure continued growth. “We must have the courage to address certain taboos,” Haddad stated.
The government has also expressed concerns to Congress about rising expenditures, such as those related to the Fundeb education fund, which were not initiated by the current administration but are being managed by it. Haddad argued that correcting distortions in the existing tax system is preferable to simply raising tax rates.
He further defended an income tax reform bill submitted to Congress, which proposes higher exemptions for the middle class and increased taxation for wealthier individuals.
— new from Reuters