Brazil: Senate President Addresses Need for Balanced Fiscal Policy
Brazil – June 10, 2025 (www.zonadeazar.com). Senate President Davi Alcolumbre has called for a review of tax exemptions granted by the federal government to help uphold Brazil’s fiscal framework. On Sunday night (June 8), Alcolumbre met with Finance Minister Fernando Haddad at the official residence of Chamber of Deputies President Hugo Motta. According to Alcolumbre, these incentives amount to more than twice the budgets of Brazil’s health and education sectors.
Tax Benefits Exceed R$800 Billion
“We must have the courage to address a very sensitive issue: the debate over tax exemptions in Brazil. These benefits can reach R$800 billion annually. When we compare that to health and education budgets, the incentives granted to various sectors of society are more than double. They are relevant and have historically been important, but it’s time for us, in a balanced manner, to address this debate,” said the Senate President.
Haddad Presents Alternatives for IOF Decree
During the meeting with Senate and Chamber leaders, Minister Haddad presented alternative measures to replace President Luiz Inácio Lula da Silva’s decree that increased the Financial Operations Tax (IOF). Alcolumbre emphasized that Congress is ready to work with the Executive Branch on compensatory measures.
Congress Ready to Tackle Structural Reforms
“There’s one truth and one path: the Chamber and Senate are united in seeking a structural solution for the Brazilian state regarding public accounts and fiscal balance. The Legislature will not shy away from debating all issues, even those that are politically or electorally sensitive. We have the courage to face, for example, the critically important administrative reform,” he stated.
New Fiscal Measures Announced
After meeting with Congress leaders, Minister Haddad announced measures to offset the revocation of the IOF decree. One proposal is to levy a 5% income tax on currently exempt securities, such as LCI (Real Estate Credit Bills) and LCA (Agribusiness Credit Bills).
Haddad also proposed raising taxes on sports betting from 12% to 18%. Additional changes target the “risco sacado” (discounted receivables), a credit instrument where banks advance payments to retailers. The Finance Minister also announced a 10% reduction in tax expenditures and additional cuts to primary spending, details of which are yet to be defined.
The proposed measures will be sent to Congress via a provisional measure once President Lula returns from an official trip to France, expected on Monday (June 9). Source: Agência Senado
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