Brazil’s New Senate Leader Aims for Tax Reform within Eight Months

RIO DE JANEIRO, BRAZIL – Brazil’s new Senate leader said on Thursday, February 4th, that he aims to approve tax reform in six to eight months and that he is working urgently to extend aid to millions of the country’s poorest and most vulnerable people.

Senate President Rodrigo Pacheco, chosen to lead the upper chamber on Monday, said he had requested a meeting with Economy Minister Paulo Guedes to discuss a new form of pandemic relief for the poor – a matter of “absolute urgency for Congress”.

His comments to journalists underscored the rising political pressure on Brazil’s government to extend stimulus measures that expired at the end of 2020.

They were a lifeline to as many as 70 million Brazilians and ensured the recession last year was nowhere near as deep as many economists had predicted, but they also helped blow a record hole in the public finances.

Guedes has vowed to reduce the record budget deficit and respect a constitutional spending cap, but a punishing second wave of COVID-19 and weak economic growth are heaping pressure on President Bolsonaro to keep spending.

Pacheco said Congress will on Tuesday form a joint committee to analyze a proposed 2021 budget. He also said congressional debate over tax reform, a government priority that has languished in Congress, will soon begin in either the Senate or the Chamber of Deputies.

For the full picture, see our Brazil Tax Reform: Complete Guide.