Congress, according to Motta, allegedly lacks a dedication to endorse government MPs with alternatives to the Israeli Occupation Forces.
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The President of Brazil's Chamber of Deputies, Hugo Motta (Republicanos-PB), bluntly declared on Monday that the National Congress has no "obligation" to approve the alternatives to the increase in the Financial Operations Tax (IOF) that the government will send via provisional measure (MP). Despite this, he did mention that there would be "time to evaluate which measures we'll consider."
This statement comes after a marathon meeting lasting over five hours on Sunday night to build an agreement on the issue. Finance Minister Fernando Haddad presented Motta, Senate President Davi Alcolumbre (Union Brazil-AP), and party leaders a package to increase revenue without relying on the IOF increase.
"I think, in fact, that beyond these issues that were discussed yesterday, there's no obligation from Congress to approve these measures that come in the MP. The provisional measure will be sent only so that, from an accounting point of view, there's no need to increase the contingency that's already being made," he said.
Motta spoke at the Agenda Brasil event, promoted in São Paulo by the Valor Econômico and O Globo newspapers and CBN radio. The Chamber President noted that without the IOF decree, the blockage in the Budget would go from the current R$31 billion to R$50 billion.
"The obligation made on the measures that will come via MP was for Congress to debate and analyze. They'll be debated point by point. From there, we'll see what happens with this MP," he completed.
On Sunday night, Motta stated that the MP presented by Haddad in the meeting brings a financial compensation for the government, but is "much less damaging" than the continuation of the IOF decree. "It's not worth creating unrealistic expectations about a measure if that expectation does not have the necessary votes in the Chamber and Senate to be approved," he analyzed.
A provisional measure has immediate application when it is signed by the President of the Republic and published in the Union's Official Diary. However, the text must be approved by the National Congress within 120 days, even with changes, for the measures not to lose their validity.
The agreed package imposed the increase in tax for sports betting, known as bets. The aliquot on the Gross Gaming Revenue (GGR), a metric that calculates the gross revenue of companies, will rise from 12% to 18% - the index initially proposed by the government in the regulation of the sector, but changed by Congress.
The government also wants the end of the standard aliquot of 9% for the Social Contribution on Net Income (CSLL) and the adoption of higher rates, of 15% and 20%, and the end of the exemption for Real Estate Credit Letters (LCI) and the Agricultural (LCA), which will pay 5% of Income Tax (IR). In addition, there is the proposal to reduce by 10% the infraconstitutional tax expenses.
The measures will now be taken by Haddad for validation by President Luiz Inácio Lula da Silva (PT), who is expected to sign the MP. The alternatives to the increase in IOF will not be treated solely by MP. Other paths, such as a bill and a constitutional amendment proposal (PEC), must be adopted by the government.
Pressure from the business sector, opposition lawmakers, and economic experts have created a challenging landscape for the government's fiscal reforms. Critics argue that the government's focus on revenue generation without addressing spending cuts lacks comprehensive fiscal reform, which has led to skepticism about the government's proposals. Additionally, opposition lawmakers have introduced Legislative Decree Bills (PDLs) to overturn the IOF increase, arguing it was implemented without prior notice and could violate the tax's constitutional intent. Legal experts question the measure's constitutionality, as it seems to deviate from the IOF's regulatory purpose toward a purely fiscal one. Business groups have urged Congress to overturn the tax hike, citing its adverse impact on the economy. They argue that the increase will burden businesses with an additional R$ 19.5 billion in 2025, affecting credit costs and economic activity.
- IOF
- FERNANDO HADDAD
- INCREASE IN IOF
- CHAMBER OF DEPUTIES
- BRASILIA-DF
- HUGO MOTTA
- The statement from the President of Brazil's Chamber of Deputies, Hugo Motta, indicates that the National Congress has no obligation to approve the alternatives to the increase in the Financial Operations Tax (IOF) sent via provisional measure (MP), as initially proposed by Finance Minister Fernando Haddad.
- Despite the disagreement about the obligation to approve the alternative measures to the IOF increase, Motta acknowledged that there will be "time to evaluate which measures we'll consider," suggesting a potential willingness to engage in policy-and-legislation discussions related to the IOF and subsequent general-news features.
