Finance Minister Fernando Haddad meets on Monday night with the president of the Chamber of Deputies, Hugo Motta (Republicans-PB), and Senate President David Alcolumbre (Union-AP). The meeting takes place amid negotiations to adjust the IOF increase decree and discuss alternatives that help balance the 2025 budget accounts.
Earlier, Haddad stated that there is “tune” between the Ministry of Finance and the presidents of the two legislative houses, and that the goal is to complete the discussions until this Tuesday, when President Luiz Inacio Lula da Silva embarks to France.
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– We know what needs to be done. We need to make a political decision on what will be done. And, in view of what I heard, I believe that this week we can solve and improve both IOF regulation, combining this with structural issues. You can’t dissociate one thing from another, ”said the minister.
Last week, Motta even gave the government an ultimatum, threatening to stop the effects of the IOF decree if the economic team did not have an alternative within ten days. Haddad himself pledged to deliver a solution to a shorter time.
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At the center of the crisis is the government’s attempt to increase revenues by 2025. After a negative market reaction to the IOF decree, published on May 22, the government retreated at two points: it maintained the tax rate on domestic funds abroad and reduced 3.1% the collection of applications from individuals abroad. The fiscal impact of the retreat is estimated at R $ 2 billion, out of a total of R $ 20.5 billion initially foreseen.
