Brazilian government does not rule out raising taxes to contain deficit

The Lula da Silva government does not rule out the possibility of raising taxes to reduce the deficit of R$230 billion expected for this year as a result of the new fiscal arrangement made to cover the expenditure ceiling overflow.

The expectation is that the Minister of Finance, Fernando Haddad, will announce a package of measures later this week.

Despite the accountability of the Ministry of Economy of the Bolsonaro government pointing to a positive balance of public accounts at the end of the term, the Lula da Silva government insists on accusing the former president of having “broken Brazil”.

The narrative that the country is broke was used to justify the approval of the ceiling-breaker PEC, which authorized the Lula government to exceed the spending ceiling by approximately R$200 billion.

The spending ceiling was created in 2016, during the Temer government, as a fiscal rule to prevent the lack of control of public accounts.

With information from Brasil Sem Medo

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