BRASILIA (Reuters) -Brazil’s Finance Minister Fernando Haddad said on Wednesday the country needs to push ahead with measures under consideration in Congress to ensure the current growth cycle in Latin America’s largest economy is sustainable.
Haddad made his remarks during a hearing in the lower house of Congress after Speaker Hugo Motta said earlier on Wednesday the government’s proposal to roll back a controversial tax hike on some financial transactions faces resistance from lawmakers.
On Sunday, Haddad proposed offsetting the revenue loss from the scaled-back financial transactions tax with higher taxes on online betting, private credit instruments and financial institutions.
“We need to understand that presenting solutions focused on increasing revenue, without cutting spending, does not work,” Motta added in a post on the X social media site.
During his opening remarks at the hearing, Haddad noted that leftist President Luiz Inacio Lula da Silva’s government is delivering average annual economic growth of 3%, but said it is necessary to “keep advancing with the economic measures being addressed to this House” to ensure the growth cycle continues.
“There is no reason we can’t continue to grow, but we must have the courage to face certain taboos,” Haddad added.
He also said the government has been expressing to Congress its concerns over certain spending trends, many of which are being honored by the Lula administration despite not having been initiated by it, such as rising expenditures related to the Fundeb education fund.
Haddad argued it is better to correct distortions in the current tax system than to simply raise tax rates.
He also defended an income tax reform bill sent to Congress that proposes higher exemptions for the middle class and a boost in taxation of wealthier people.
(Reporting by Marcela Ayres; Editing by Paul Simao)
