By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – Despite statements earlier this week by some of interim president Michel Temer’s closest aides that the government would not increases taxes in 2017, Brazil’s Finance Minister, Henrique Meirelles told a Chamber of Deputies Commission on Wednesday that the decision is not final.
“Temporary taxes may be necessary,” Meirelles told Chamber representatives during his speech to the special commission on the new fiscal Regime. “We can not discard it (increase) in the future,” added the official.
On Tuesday, Temer’s Chief of Staff, Eliseu Padilha, told reporters that the government had decided that it would not raise taxes this year and in 2017 to achieve the fiscal target.
“The decision (not to increase) has already been made by the economic team following the guidance of President Michel Temer,” Padilha had said. According to the Chief of Staff the government acknowledged that Brazilian society could not bear increases in taxes.
Meirelles on Wednesday, agreed with his colleague, telling congressional representatives that the tax burden in Brazil is already very high and that during a time of recession such as this in the Brazilian economy tax increases should be a last resort. He stressed that the government’s economic team is working on cutting costs and evaluating of all federal programs.
According to Meirelles the new fiscal regime proposed by the government, where the growth of public expenditures will be limited to the inflation of the previous year will go a long way to help stimulate better expenditure patterns, increasing confidence in the economy and bringing back private investments.
“I think the approval of this decree is the most efficient. We must work to improve the quality of spending,” he concluded.