Tax reform should be voted on this year, Finance Minister Haddad says

Finance Minister Fernando Haddad participated on Tuesday (Jan. 17), in Davos, Switzerland, in the panel Brazil: A New Roadmap, at the World Economic Forum. During his speech he said the government intends to vote on the tax reform proposal this year.

"The tax reform that we want to vote on in the first semester refers to consumption tax. And in the second semester, we want to vote a tax reform on income to exempt the poorest layers of the population from taxation and to burden those who don't pay taxes. We will rebalance the Brazilian tax system to improve income distribution in Brazil," the minister said.

During the panel, Haddad explained that the idea is to write a consensual text, using the two proposals for amending the Constitution (PEC) that are being discussed in the National Congress, one in the House of Representatives and the other in the Senate. The proposals are based on ideas suggested by the special secretary for Tax Reform, Bernard Appy, who held a similar position in the ministry from 2007 to 2009, in the second term of Lula's government.

Deficit

The minister also stated that if federal revenues and expenditures return to the level before the COVID-19 pandemic, the government will be able to zero the primary deficit in two years. "We intend to return expenditures and revenues to the same pre-pandemic crisis level, which is 18.7 percent (of the GDP - Gross Domestic Product). If we achieve that in two years, we will be able to zero out the deficit."

Haddad also spoke about the government's economic agenda. Among the main points, he mentioned the proposal to democratize the access to credit and increase the minimum wage.

G-20

Brazil Finance Minister also commented on Lula's international agenda, who is expected to visit the United States in February and participate in the G20 meeting, a group that gathers the 20 largest economies in the world, to be held in India in April. According to Haddad, the agenda should include issues such as environment, consolidation of democracy, fight against inequality and hunger, and peace.

"Fortunately, we will be with a natural-born diplomat, namely President Lula. A person of high diplomacy, who can talk to everyone naturally. He manages to make antagonistic people reach accordance. We are at a moment in which we have to take advantage of President Lula's leadership to put on the international agenda, in a more incisive way, points that are valuable to him, a person who has been in public life for 50 years and who has had many opportunities to defend established theses," he emphasized.