New fiscal framework should be presented to Lula later this week, says Haddad

Finance Minister Fernando Haddad said this Monday (13) that the new fiscal framework that will replace the spending cap should be presented to President Luiz Inácio Lula da Silva (PT) later this week. He intends to have a meeting with Vice President Geraldo Alckmin later this afternoon “if his schedule allows”.

Haddad said that the design of the new fiscal rule is ready and approved by the different teams in the economic area, and that now it depends only on the president’s approval. Last week, Minister Simone Tebet, of Planning, went so far as to say that the design of the new framework will “please everyone, including the market”.

“I would like to do [levar ao presidente Lula]
before the trip to China, so that we have time to give the Ministry of Planning the conditions to start preparing the LDO, which is the Budget Guidelines Law [de 2024]already based on the new rule”, he said during an event promoted by the newspapers O Globo and Valor Econômico.

Still according to the minister, in addition to the fiscal framework project, he also delivered the parameters that he considers most adequate for the economy to move forward – tax reform, among them. Haddad says it is possible to approve the project by July in the Chamber of Deputies and by October in the Senate.

The minister also ruled out any possibility of returning a tax similar to the CPMF and said that he will not change the Simples rules.

“[Essa reforma] will put an end to a huge distributive conflict in the public-private and public-public country. It will eliminate those completely arbitrary exemptions that were made based on ‘crony capitalism’, which must end in Brazil, and we will have transparency, know where the money is coming from and where the public is going”, he said.

He says that the “efficiency shock” that the tax reform will bring “it is not possible to estimate at this moment”, but that it could be between 10% and 20% of the GDP (Gross Domestic Product). And that, according to the minister, makes room for the Central Bank to start reducing the basic interest rate, which is currently at 13.75% per annum.