Brazilian govn't rules out tax rises up to 2017

The government has decided it will not raise taxes this year or in 2017 in a bid to meet the fiscal target. The announcement was made today (Aug. 23) by the president's Chief of Staff Eliseu Padilha, during a statement in which he acknowledges the Brazilian society can no longer afford tax rises.

As a result, Padilha argued, the project that limits the increase in public expenditures to the changes in the inflation rate from the year before “is unnegotiable.” This calculation is outlined in the Bill for Budgetary Guidelines (LDO in the original acronym), currently under deliberation in Congress.

“Of course it is up to the Congress to make the final decision, but, if we fail to get the approval for curbing expenditures, we'll have a significant increase in the public debt,” he argued.

Padilha further stated that, since tax rises are no longer considered, the public accounts will have to be balanced out through slashes in spending. “We'll take it from the roads, from security, as the expenditures with health care and education must be maintained according to the Constitution—they can't be changed. We'll take it from wherever we can.”

Pension Reform

The minister once again defended the need for a pension reform. "We have to make Brazil viable in the long run. There are two essential situations that simply need to be addressed. One is the public debt issue, hence the reason for the ceiling; the other is the pension reform. If they are not addressed, in a few years, a person will get to the bank with their pension card and there will be no money for the payment."

Pay increases

Eliseu Padilha has also confirmed the government's decision not to negotiate salary increases before the final impeachment trial of suspended President Dilma Rousseff, since negotiations were not concluded with the government's support base.

Translated by Fabrício Ferreira / Amarílis Anchieta