Haddad delivers a new tax rule proposal to Lula – 03/15/2023 – Market

Haddad delivers a new tax rule proposal to Lula – 03/15/2023 – Market


Finance Minister Fernando Haddad (PT) said this Wednesday (15) that the proposal for a new fiscal rule, which will replace the spending cap, has already been delivered to President Luiz Inácio Lula da Silva (PT).

“It’s already in [Palácio do] Planalto”, replied Haddad when asked by journalists at the headquarters of the economic ministry about the delivery of the design of the new fiscal framework to the Chief Executive.

The expectation is that the final text will be completed before Lula’s trip to China, scheduled for the 24th. The president’s endorsement is the last step before the proposal goes to the National Congress.

Although he has not yet presented details, the minister has previously said that the new fiscal rule will be simple and will not be a goal of controlling the public debt. A Sheetmembers of the government involved in the debate stated that the framework will allow reaching the goal of zeroing the primary deficit as early as 2024.

According to Haddad, in an interview with CNN Brasil, the proposed new model will not reproduce the limitations identified in other mechanisms, such as the LRF (Fiscal Responsibility Law) and the spending cap – which limits the growth of public expenditure to registered inflation. in the previous year.

The Minister of Planning and Budget, Simone Tebet (MDB), discussed the design of the new fiscal rule with Haddad last week. After the meeting, she said she was satisfied “on the budgetary and fiscal side” and added that the proposal guarantees investment and will please everyone, “including the market”.

On Tuesday morning (14), Haddad presented the proposal to Vice President Geraldo Alckmin (PSB), who also accumulates the position of Minister of Development, Industry, Commerce and Services. According to the head of the Treasury, the reception was positive.

By directly interfering with expectations surrounding the trajectory of public accounts over the next few years, the new fiscal framework to be proposed by the government is one of the most awaited topics by economists in the private sector.

On the 2nd, Haddad had already declared that the announcement of the new fiscal rule was brought forward to March so that the PLDO (Budget Guidelines Bill) could be forwarded to the National Congress already based on the new fiscal rule.

The minister also said that he wants to present the framework model before the next meeting of the Copom (Monetary Policy Committee), scheduled for March 21st and 22nd. The government hopes that the new fiscal rule will open space for the Central Bank to anticipate the start of the interest rate cut – today the basic rate (Selic) is at 13.75% per annum.



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