Haddad changes the date of the Income Tax reform and plans to send it at the end of the year – 07/18/2023 – Market

After predicting the presentation of the Income Tax reform for August, the Minister of Finance, Fernando Haddad, said this Tuesday (18) that the government will send the project to Congress only after approval of the restructuring of taxes on consumption, foreseeing the edition of the measure at the end of this year.

In an interview with Sheet on Monday (17th), Haddad said he predicted resistance to the changes, but that the data prepared by the government will show the need to change the rules of taxation of wealth and income.

The minister also changed his position by saying that he does not count on the Income Tax reform to fulfill the objective of zeroing the government’s primary deficit in 2024.

Last week, Haddad had stated that the federal government would not wait for the end of the processing of the Tax Reform of consumption, which still depends on analysis by the Senate after being approved by the Chamber, to send the second phase of the reform to parliamentarians, which will deal with taxation about income. On the occasion, he stated that the measure would be sent together with next year’s budget project, which will reach the Legislative at the end of August.

In the same interview last week, he had argued that the second phase of the reform would need to be considered by Congress along with the Budget to ensure that the targets established by the new fiscal framework were met. The two positions have now changed.

“Only (we will send) after the approval of the reform of the taxation of consumption, towards the end of the year”, said Haddad. “We are not counting on this to meet the target (zero in 2024)”.

Asked about the main axes of the second phase of the reform, the minister said that “internal discussions” on the subject will still be initiated at the Ministry of Finance.

He highlighted that the government should not take advantage of the project presented by the Jair Bolsonaro government, which has already been approved in the Chamber and is awaiting analysis by the Senate. The idea is to send a new text, which will be analyzed from scratch by parliamentarians.

According to the minister, the government should also take advantage of the IR reform to jointly discuss the rules for exemption from the payroll of companies.