Haddad: in case of deficit, creation of tax benefits will be prohibited

In the speech in which he announced the main measures of the federal government’s spending cut package, on Wednesday night (27), the Minister of Finance, Fernando Haddad (PT)reported that there will be a kind of “lock” for new tax benefits.

In his speech, the head of the economic team stated that, in the event of a primary deficit in the government’s accounts, the “creation, expansion or extension of tax benefits” will be prohibited.

“To guarantee the results we expect, in the event of a primary deficit, the creation, expansion or extension of tax benefits will be prohibited,” Haddad said on national TV.

Also read

Haddad announces fiscal package and promises savings of R$70 billion in 2 years

On national television, Fernando Haddad announces cost-cutting measures, but also confirms exemption from income tax for those earning up to R$5,000. Minister guarantees “commitment to the country’s fiscal sustainability”

The Finance Minister did not detail how this lock will work. This should only happen on Thursday (28), when Haddad will participate in a press conference to provide greater detail on the measures.

“Fighting inflation, reducing the cost of public debt and having lower interest rates is a central part of our humanistic view of the economy. The Brazil of today is no longer the Brazil that closed its eyes to inequalities and the difficulties of our people. Those who earn more must contribute more, allowing us to invest in areas that transform people’s lives”, said the minister.

Also read

“Biggest income reform in our history”: read Haddad’s full statement

Minister of Finance announced the first measures of the tax package and also confirmed that the government will exempt from Income Tax (IR), from 2026, taxpayers who receive up to R$5,000 per month

The Finance Minister also announced measures to contain public spending, the main concern of economic agents. Among them are:

• Inclusion of the minimum wage increase policy in the limitations of the fiscal framework;
• Proposal to end salaries above the constitutional ceiling, the so-called “super salaries”;
• A call for beneficiaries of social programs, such as Bolsa Família and Benefício de Prestação Continuada (BPC), to update their data, if they have not done so in the last two years;
• Changes in military retirement and pension rules, such as the end of fictitious death – which allows the payment of pensions to relatives of those who were expelled from the Armed Forces;
• Setting a minimum retirement age for military personnel (55 years old), accompanied by a transition rule.

According to the economic team’s estimates, the set of measures in the fiscal package should generate savings of around R$30 billion to R$40 billion per year.