BRASILIA, Feb 21 (Reuters) - Brazilian Finance Minister Fernando Haddad said on Wednesday that the government would resend a proposal to phase out the extension of payroll tax exemptions for various labor sectors through a separate bill to Congress.
His remarks were made to journalist Miriam Leitão, who reported them in the newspaper O Globo before the full interview was aired on GloboNews TV channel later on Wednesday.
At the close of 2023, the federal government introduced an executive order featuring measures to restrict tax benefits across various sectors and ensure fiscal compensation, helping it to meet its fiscal goal of eliminating the primary budget deficit this year.
"The part related to the tax exemption (to the labor sectors) will be exclusively addressed in a bill, it will be removed from the executive order," said Haddad during the interview.
While the executive order has immediate validity, it must be subsequently approved by lawmakers within four months, otherwise it expires. In practice, removing this matter from the executive order will put it on a slower legislative track.
The executive order was intended to replace the text of an approved bill that President Luiz Inacio Lula da Silva vetoed, only to have it overturned by Congress in mid-December.
Lawmakers voted to extend payroll tax exemptions for 17 labor sectors until 2027, with an impact of 12 billion reais ($2.43 billion) that had not yet been incorporated into the 2024 budget.
The executive order also included changes to reduce post-pandemic tax benefits granted to the event industry through the "PERSE" program, eventually eliminating it by 2025, and a measure to restrict taxpayers' ability to offset taxes annually.
According to Haddad, these two initiatives would be maintained in the already submitted executive order. ($1 = 4.9358 reais) (Reporting by Marcela Ayres; Editing by Sandra Maler)
