Government decides whether to review the fiscal target next week, says LDO rapporteur By Reuters

2023-11-08 02:00:41

© Reuters. Minister Fernando Haddad 10/18/2023 REUTERS/Adriano Machado

By Maria Carolina Marcello

BRASILIA (Reuters) – The rapporteur of the Budget Guidelines Law (LDO) of 2024, deputy Danilo Forte (União-CE), stated this Tuesday that the government is evaluating the possibility of requesting a review of the zero fiscal target in 2024 and should set a position by next week.

According to the deputy, the deadline came from the Minister of the Civil House, Rui Costa, with whom he met on Tuesday afternoon after the approval of the preliminary opinion of the LDO in the Mixed Budget Committee (CMO) of Congress.

“He asked for a deadline so that by next week the amendment that will revise the target will be presented or not,” said the rapporteur, adding that the minister would be waiting for “some annexes that the Treasury has yet to present.”

The stipulation of the deadline by the palace minister contrasts with the perspective of the economic team, which is negotiating the approval of economic measures in Congress capable of increasing revenue. Sources following the negotiations told Reuters earlier that the government would not send a message to Parliament to modify the target, at least for now. The result of these votes would indicate the need or not to change the target.

The impasse was established after President Luiz Inácio Lula da Silva’s statement that the zero deficit target was unlikely to be maintained.

Lula’s speech ended up placing the Minister of Finance, Fernando Haddad, the Minister of the Institutional Relations Secretariat, Alexandre Padilha, and Vice President Geraldo Alckmin, on the opposite side to the Minister of the Civil House, Rui Costa, of the Minister of Management , Esther Dweck, and PT president, Gleisi Hoffmann (PR), who defended immediate change.

SUBSVENTIONS

For the LDO rapporteur, however, the expectation of approval of measures to increase revenue may be frustrated.

One of the proposals on the Treasury’s horizon to increase public coffers, the subsidy MP, which changes the taxation rules for tax benefits, should face considerable difficulty, in Forte’s opinion.

There is, on the other hand, a certain optimism regarding the conclusion of the vote on the tax reform, approved this Tuesday by the Constitution and Justice Committee (CCJ) of the Senate, but with a plenary vote still pending.

“I personally find it very difficult to vote on the subsidy issue,” said the rapporteur, explaining that large companies and industries that have signed contracts with state governments will put pressure not only on governors, but also on parliamentary benches so that the text is not voted on.

“I continue with the same thought: it is better to have a Budget that is closer to reality, more feasible, than to create subterfuges that can often, down the road, cause a problem, a much greater inconvenience for Brazil”, he said.

“In my assessment, I continue to think that the goal is very optimistic and that the conditions that are placed there do not give us that security. That’s what I’ve been saying for a long time.”