ASSESSMENTS

In Brazil, Lula's Obstacles to Passing Economic Policies Continue To Mount

Jun 18, 2024 | 19:36 GMT

Brazilian President Luiz Inacio Lula da Silva is seen at a ceremony in Brasilia, Brazil, on June 17, 2024.
Brazilian President Luiz Inacio Lula da Silva is seen at a ceremony in Brasilia, Brazil, on June 17, 2024.

(EVARISTO SA/AFP via Getty Images)

In Brazil, Congress's rebuke of President Luiz Inacio Lula da Silva's latest attempt to increase revenue collection highlights lawmakers' growing fatigue with Lula's fiscal agenda, which will likely slow policymaking and fuel regulatory and legal uncertainty. On June 11, Brazil's Congress refused to analyze a provisional measure that limited companies' ability to use tax credits and extinguished cash reimbursements of presumed credits. The legislature's decision voided the policy, which had been effective immediately upon its publication on June 4 and was aimed at helping reduce Brazil's fiscal deficit by generating $5.4 billion in revenue. The provisional measure triggered strong pushback from Brazil's political establishment, industry associations and businesspeople, indicating fatigue with President Lula's fiscal agenda, which prioritizes cutting tax incentives or closing loopholes in order to fund increased social spending....

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