Tax waivers, financial benefits total BRL 646 bi in 2023

The volume of tax breaks and financial benefits granted by Brazil’s federal government reached BRL 646 billion in 2023, Planning and Budget Minister Simone Tebet and Finance Minister Fernando Haddad said Monday (Jun. 17). The two presented the figure to President Luiz Inácio Lula da Silva, who, Minister Tebet said, was “negatively impressed” by the increase in the volume of subsidies in the country.

The two ministers met with the president to discuss the General Budget for 2025, to be drawn up in June and submitted to Congress by August 30. The proposal must include a plan to slash spending, a topic currently under discussion at the Ministries of Finance and Planning.

Officially, the meeting served to comment on the vote by the Federal Court of Accounts on the government’s 2023 accounts. Despite approving them, the body made some reservations, most notably the introduction of 32 tax breaks that resulted in the government failing to raise BRL 68 billion.

"What caught the president's attention in Minister Haddad's address was the increase in tax exemptions, which is also included in the court report. There are two major concerns, the growth in social security spending and the growth in tax spending from [tax] waivers," Minister Tebet said.

According to Tebet, President Lula asked the economic team to come up with alternatives to reduce tax incentives and subsidies. “The president was rather negatively impressed with the increase in subsidies, which is hitting nearly six percent of Brazil’s GDP,” she stated.