Income Tax: Haddad wants change in the 2nd semester – 01/17/2023 – Market

Minister Fernando Haddad (Finance) said this Tuesday (17) in a panel on Brazil at the World Economic Forum that the government intends to vote on an Income Tax reform in the second half of the year, slicing, in practice, the tax reform. Haddad also said that he intends to present the government’s fiscal rules by April.

“There is a tax reform that we want to vote on in the first semester, it is the consumption tax. But, in the second semester, we want to vote on the income reform to relieve the poorest layers and to burden those who do not pay taxes”, he declared in Davos, Switzerland.

According to Haddad, this would mean “rebalancing the Brazilian tax system to improve income distribution”.

He did not provide further details or speak to journalists immediately after the panel. The lean Brazilian delegation has been fulfilling a frenetic agenda in this forum week.

The minister participated in a panel mediated by the director of Latin America at the forum, Marisol Argueta, alongside his colleague Marina Silva (Environment) to talk about Brazil. A good part of the audience in the room with 88 seats, partially filled, were Brazilians.

On the eve, Haddad told journalists at the event in the Swiss city that the government does not intend to increase taxes. He was mainly referring to the IPI (I*tax on Industrialized Products).

With the shadow of a fiscal gap and the need to balance the accounts —something Haddad claims the Lula government is committed to—, a change in the IR to increase rates for higher incomes started to be suggested.

The minister, in addition to talking about institutional solidity and environmental protection, has repeated in the forum the idea that the government intends to balance the accounts. The three themes, especially the last one, are the target of the main questions raised by investors at the event to Haddad.