Brazilian Finance Minister Fernando Haddad has said that the government’s planned tax reform will focus on big businesses and will not affect individual taxpayers.
“We’re not talking about the general public, we’re talking about those who don’t pay [taxes], and unfortunately those who don’t pay are the biggest Brazilian companies,” Mr. Haddad said in an interview with BandNewsTV.
The finance minister argued that 400 to 500 companies with super-profits in Brazil avoid paying taxes or benefit from subsidies through “illegitimate artifices” introduced into unrelated laws over time — a maneuver known as a jabuti or “tortoise” in Brazilian political jargon.
Correcting such distortions is necessary to clean up Brazil’s public finances, strengthen its fiscal position, and ensure that the government can finance promised social policies, Mr. Haddad said. He acknowledged that the final say on tax reform will lie with Congress, where the government does not have a solid coalition.
Mr. Haddad has been at the forefront of the Luiz Inácio Lula da Silva administration’s attempts to tame public spending and prevent public debt from ballooning, while pursuing a social agenda to make good on promises to work toward a more equitable Brazil.
Last week, the government unveiled the first details of its new fiscal framework to that end. Today, Mr. Haddad said that the approval of this new fiscal framework would help attract investment to Brazil. He also argued that its implementation would require a drop in interest rates.
Interest rates in Brazil remain persistently high, and have been point of conflict between the Lula government and the governor of the independent Central Bank, Roberto Campos Neto.
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