SAO PAULO (Reuters) -Brazil Finance Minister Fernando Haddad said on Thursday that the government will take time to evaluate alternatives to bolster the country’s budget.
Haddad’s remarks to journalists in Brasilia came after the government was dealt a blow in Congress when the lower house removed a proposal to overhaul taxation on investments from its voting agenda on Wednesday.
The government had initially expected to raise 20.9 billion reais ($3.90 billion) in additional revenue next year from the tax measure to help meet its fiscal target.
The proposal included changes such as the increase of tax on interest on equity payments and the unification of the income tax rate on financial investments.
Brazil’s Supreme Court has ruled that the president has the authority to change certain tax rates, Haddad said, “and that gives us comfort to reach the end of the year.”
Some taxes in Brazil are considered regulatory in nature and can therefore be changed unilaterally by the president by decree, such as the IOF tax on financial transactions, as well as import and industrialized products (IPI) taxes.
President Luiz Inacio Lula da Silva said in an interview with a local radio station earlier on Thursday that he asked his team not to worry about the move in Congress.
From next Wednesday the government would discuss how the financial system can “pay what it owes” to the country, he added.
($1 = 5.3547 reais)
(Reporting by Isabel Teles; Editing by Aida Pelaez-Fernandez and Mark Porter)
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