Good morning! This week, we talk about disputes between the Finance Ministry and the Senate over payroll tax. Brazil’s tech diplomacy and regulation efforts. Gambling worries. And Vale jitters.
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Finance Ministry, Senate voice disagreements in the press
Congressional and government leaders are engaged in highly public negotiations over extending payroll tax breaks for 17 economic sectors.
Background. In 2011, during the Dilma Rousseff administration, the government allowed several sectors to pay payroll taxes of only 1 to 4.5 percent of their gross revenues, instead of the standard rate of 20 percent of all salaries paid in a month.
- These tax breaks were supposed to benefit the sectors that create the most jobs in Brazil. However, a study published in September 2023 by the Institute of Applied Economic Research (Ipea) found that these sectors are not the ones that employ the most people, and that many of them have reduced formal employment since 2011.
- The benefit was set to expire at the end of 2023, but lawmakers extended it...