Review of Tax Subsidies Postponed until after Bolsonaro's Term

Guedes contradicts his own speech and foresees in PEC benefit review only in 2026


The Minister of Economy, Paulo Guedes, introduced a proposed change to the constitution to decrease subsidies. But his measure proposes changing the constitution only in 2026—after the end of Jair Bolsonaro’s mandate.

The measure is contained in the PEC (Proposed Amendment to the Constitution) that changes tax rules. The rules of the so-called Emergency PEC, formulated by Guedes, create a subsidy reduction mechanism only from 2026.

Another instrument foreseen in the text is the review of these benefits every four years at most. That is, the review is mandatory only in 2024 if the proposal is approved in 2020.

Brazil's President Jair Bolsonaro looks on near Brazil's Economy Minister Paulo Guedes during a meeting with businessmen at the National Confederation of Industry (CNI) in Brasilia, Brazil December 11, 2019. REUTERS/Adriano Machado ORG - REUTERS

Submission of a grant plan has become a requirement of the LDO (Budgetary Guidelines Law) that guided the 2019 accounts.

Faced with fiscal difficulties, members of Congress are required by law that the government draw up a plan for revising income and expenses for the period from 2019 to 2022.

The rule includes tax, credit, or financial benefits or incentives.

The document should also be accompanied by legislative proposals to address benefit reviews, with estimates of the respective annual impacts of each action.

Translated by Kiratiana Freelon

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