Tax reform path summarizes new political standard – 7/5/2023 – Bruno Boghossian

Lula has said little about tax reform since returning to the Planalto Palace. In speeches and interviews, the president referred to the proposal in general terms and commented on the importance of the project without discussing details. He celebrated the perspectives of approval of the text, but avoided taking the flag in his hands.

It is not that the government is not interested in the subject. Lula wanted a reform with a redistributive impact, but the simplification debated in Congress was already considered a big step. The Treasury created a special secretariat to take care of the matter, and Fernando Haddad was directly involved in the negotiation.

The progress of the proposal summarizes a process of adaptation by the government and other actors to the political arrangements that mark Lula’s initial six months. The president examined the limits of his role, the centrão worked to maximize its gains, and the opposition showed signs of a phase of instability.

The attempt to approve the reform has been treated in Brasília as yet another operation dominated by Congress —specifically by Arthur Lira. Lula’s absence from the public debate was sold as a tactical move to reduce the risks of contamination in the discussions and allow the president of the Chamber to build his majority in the plenary.

The government was in a hurry to approve other items on the economic agenda, but had to comply with Lira’s schedule, which elected the tax reform as a kind of seal of quality for its management. To improve the chances of approving the complete package, the Planalto released a generous load of amendments, supplying groups close to the president of the Chamber.

The path of the proposal, whatever its outcome, still exposes an early collision between Jair Bolsonaro and Tarcísio de Freitas. The former president declared the opposition non-negotiable and tried to stamp the project as a “PT tax reform”. The governor left the former chief talking to himself and met with Haddad to arrange adjustments to the text.

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