The Minister says there are proposals to push ahead with cost-cutting measures this year to offset the relief on labour costs for companies
BRASÍLIA – Strengthening the political decision on how to compensate tax relief on wages it no longer depends on the Treasury, on the minister Fernando Haddad highlighted the government’s “effort” to cut mandatory spending by approximately R$ 26 billion for the Balance next year, as announced last week. Adding to this volume the need to compensate for between R$ 17 and R$ 18 billion in foregone social security benefits, Haddad stressed that the amount of more than R$ 40 billion is “fundamental” for the 2025 budget balance.
“We have made an effort to reduce mandatory expenses by about R$ 26 billion, there are these R$ 17 billion, R$ 18 billion that amount to more than R$ 40 billion and that are essential for balancing the budget next year. R$ 17 billion enters and R$ 18 billion is the calculation made by the Senate for the exemption”, Haddad listed.
The minister said there were proposals to bring forward some spending cuts this year to offset the tax cuts.
“But once again we are now providing more technical advice, because with the return of the deputy a political decision has already been made. (from PIS/Cofins). We support the senators, but the decision is up to them,” he said. “There is no proposal from the Treasury. The Treasury made a proposal that was not accepted, the deputy was returned and at their request we made several calculations. But it is their decision, now the deadline for the STF’s decision expires,” the minister recalled, questioned on the fact that the Senate did not properly take on board the Treasury’s suggestions.
The economics group chief also compared the advice given to the Senate on the tax cut issue to what the Treasury Department is doing on tax reform with the House. After submitting a “technical” draft, the department is now providing “advice” on decisions that could affect the rate of the new consumption tax, he said.
“Since the proposal was not accepted (compensation)another one needs to be implemented and it is up to us to provide technical advice so that the Senate can make the best decision,” Haddad concluded.
Source: Terra
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