Quoted to report tax framework in the Chamber foresee voting for May – 03/04/2023 – Market

Deputies quoted to report on the project for the new fiscal framework claim that the vote on the proposal should be completed in the Chamber by the end of May.

Although the government of President Luiz Inácio Lula da Silva (PT) has not yet presented the text to Congress, allies of the President of the Chamber, Arthur Lira (PP-AL), have said that the procedure will be quick in the House.

Lira decided that the rapporteur, responsible for negotiating changes in the project, will be a deputy from his party, the PP. André Fufuca (MA), Fernando Monteiro (PE), Júlio Lopes (RJ) and Cláudio Cajado (BA) are quoted. The name of Staff has been gaining strength in recent days.

The expectation, according to government sources, is that the text will be completed this Monday (3). The Ministry of Finance will send a draft to the Civil House, which will then send the project for consideration by Congress, which may occur on Thursday (6).

“Next week there will be no session in the Chamber and the Senate, so we are going to take advantage of this moment to send the clearest and most transparent text that can be written”, said Minister Fernando Haddad (Finance) last Thursday (30) .

The schedule may suffer delays due to the long Easter holiday, which should reduce the presence of parliamentarians in Brasília this week. However, the government wants to present the text before April 14, when the economic team has to deliver the LDO (Budget Guidelines Law) project for 2024.

Last week, the president of the Chamber stated that he will work for the vote to take place by the end of April. But his allies believe that this deadline will not be enough for the House to analyze the issue.

The proposal will begin to be processed by the Chamber, which will give the final word. A supplementary bill of law is normally forwarded for analysis by committees specializing in matters covered by the proposal —the so-called merit committees.

There are also Finance and Taxation and Constitution and Justice commissions, which can analyze the merits and/or admissibility of supplementary bills.

In addition, House leaders say they need to thoroughly evaluate each point of the new framework as the rule is more complex than the spending cap – the norm currently in force.

Since the proposal for the new framework received Lula’s endorsement, several teams from the economic wing have begun to draft the bill to be forwarded to the Legislature.

The proposal assumes a growth in federal expenditures limited to 70% of the increase in net primary revenues observed in the 12 months up to June of the previous year.

The pace of increase in expenses in each year will be linked to the variation in revenues, provided that it is within the range of 0.6% and 2.5%. These will be the floor and cap of actual increase in spending under the new rule.

The framework also stipulates an annual primary result target, but with an upward and downward tolerance interval —like the inflation targeting system.

Lira has said that he should only announce the project’s rapporteur when the government delivers the text.

The nomination had been promised to Deputy Mendonça Filho (União Brasil-PE), but, according to reports by parliamentarians, the failure of negotiations between the party and the PP for the formation of a party federation between the two parties ended up undermining the agreement.

Lira’s allies also claim that, when deciding to place a coreligionist in this role, the mayor and the PP president, Ciro Nogueira, want to have control over the version that will be approved in Congress.

Nogueira is a senator for Piauí and was Minister of the Civil House in the government of Jair Bolsonaro (PL).

In this context, Cláudio Cajado and André Fufuca are identified as favorites in the race for the position of rapporteur.

Cajado was president of the PP, while Nogueira was in the Civil House. The deputy is familiar with the fiscal area due to his background in the CMO (Mixed Budget Commission), which is responsible for approving the Budget in Congress.

And Fufuca is the leader of the PP in the Chamber and one of the closest to the party president.

The forecast of the president of the Chamber is that the new fiscal framework will be voted before the proposal of tax reform – which is under discussion in the House and is also one of the priorities of the Lula government.