Broad tax reform has a low chance of approval this year and other weekly topics

BRAZIL POLITICS - Report 12 Oct 2021 by Murillo de Aragão and Cristiano Noronha

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This is a short week in Brasília due to the October 12 holiday. In the House, the focus will be on the discussion of the bill that deals with the ICMS tax on fuels. The rapporteur of the bill on Auxílio Brasil may submit his report. In the Judicial branch, the STF will analyze the constitutionality of the extension of the payroll tax exemption.

This week's Talking Points:

• The summoning of Minister Paulo Guedes.
The government’s relationship with Congress is experiencing ups and downs — a consequence of the instability and lack of a solid political governing coalition in the House. After it was reported that Minister of the Economy Paulo Guedes and President of the Central Bank Roberto Campos Neto maintain offshore companies in tax havens, a series of requests for both to provide statements on the matter were analyzed by committees in the House and the Senate.

• Broad tax reform has a low chance of approval this year
Despite the optimism of Senator Roberto Rocha (PSDB-MA), the rapporteur of the broad Tax Reform proposal in the Senate (PEC nº 110), it is unlikely that the vote on the proposal in the House will take place this year. Senator Rocha expects the Senate's Constitution and Justice Committee (CCJ) to vote on his text in October. However, in the first place, the rapporteur has not even formally submitted his text and, when he does, he will be granted at least a week to review the text.

• The União Brasil party.
Last week, the national directories of the PSL and the DEM approved the merger of the two parties, creating the União Brasil party. Its national president will be federal Deputy Luciano Bivar (PSL-PE). The former mayor of Salvador, ACM Neto (DEM), was given the position of general secretary of the party. União Brasil marks the emergence of a large right-wing party in the country. In the House, for example, its caucus of 81 deputies is only inferior to the number of deputies elected by the former PFL – and now ex-DEM – in the 1998 elections, when the party elected 105 members.

• Lula has a busy agenda in Brasília.
Former president Lula (PT) gave a press conference last Friday, October 8, after the political moves he carried out in Brasília (DF). He reinforced the defense of his legacy in the social area, criticized the Jair Bolsonaro government in the fight against hunger, unemployment and inflation, affirmed that he was a victim of political persecution by Operation Car Wash and positioned himself as anti-Bolsonaro.