UPDATE 1-Brazil to seek neutral tax reform
BRASILIA, Jan 27 (Reuters) - Brazil Treasury Secretary Rogerio Ceron on Friday said the Finance Ministry will propose a neutral tax reform, meaning the government does not intend to raise taxes, while economists debate the improbability of the country achieving fiscal balance without them being increased.
Speaking at a news conference, he stressed that neutrality will be defined in relation to a certain level of revenue over GDP, stressing that a level below 18% "is unsustainable."
Finance Minister Fernando Haddad said President Luiz Inacio Lula da Silva's newly inaugurated government would seek to approve a tax reform on consumption in the
first half of the year
, and then dedicate itself to tax reform on income on the second half.
Ceron also said that the economic team wants to present a new fiscal framework proposal before submitting the 2024 budget law in April.
The market eagerly awaits the new framework after Lula secured Congress approval for a multi-billion-reais spending package that bypasses the constitutional spending cap to meet campaign promises. (Reporting by Marcela Ayres; Editing by Mark Porter and Diane Craft)