Brazil’s Economy Gets More Freedom and Less Bureaucracy

RIO DE JANEIRO, BRAZIL – President Jair Bolsonaro approved yesterday, September 20th, in a ceremony at the Palácio do Planalto, the Provisional Measure (MP) on Economic Freedom, now converted into law. The Provisional Measure (MP) had been introduced by the government to reduce bureaucracy and simplify the opening of companies, particularly micro and small-sized, and had already been approved by the Federal Senate on August 21st.

Among the main changes, the law relaxes labor rules, such as waiving the need for admissions log for companies with up to 20 employees and removes the need for permits for activities considered low-risk. The text also separates the assets of company partners from the debts of a legal entity and bans the assets of companies in the same group from being used to settle a company’s debts.

Regarding the final text approved by Congress, there were four presidential vetoes. One of them, which was negotiated with the Parliament itself, removed the provision that allowed for immediate approval of environmental licenses.

The government vetoed an item in the MP, amended by legislators during the procedure, which makes testing of new products or services more flexible. In justifying the veto, the president argued that the wording, as it came from the Legislative, “would allow the use of human guinea pigs without any protection protocol, which violates not only the Constitution but international treaties for testing new products”.

A further vetoed provision allowed the establishment of a taxation system outside the tax law. The veto was requested by the Ministry of Economy, according to the Palácio do Planalto. The provision stipulating the enactment of the new law within 90 days was also vetoed. Thus, the Provisional Measure on Economic Freedom takes effect as of its publication in the Federal Gazette (DOU), on a special edition on Friday.

“This Provisional Measure, according to studies by the Secretariat of Economic Policy, can generate, within ten years, 3.7 million jobs and over seven percent economic growth. These are very expressive and necessary numbers for our country”, said the special secretary of Debureaucratization, Management and Digital Government, Paulo Uebel.

In a brief speech, Jair Bolsonaro said that the MP’s approval is a first step to reduce bureaucracy in public services in Brazil.

Source: Agência Brasil