*Brazil’s President Luiz Inácio Lula da Silva has revoked parts of a decree he issued in late-December 2023 which re-imposed taxes on payrolls for 17 sectors. Congress had approved legislation to extend payroll tax exemptions, but Lula vetoed the bill in November. Tensions flared up between the executive and legislative branches in mid-December when lawmakers voted to overturn the presidential veto. After Lula retaliated by imposing the taxes again by decree, senate president Rodrigo Pacheco began negotiating with the Lula administration for a solution to these tensions over taxes. According to local media, Lula’s decision to revoke the payroll taxes comes amid these negotiations with the leaders of parties in congress with ties to the lobby groups of industries affected by the taxes. However, the Lula government is still prioritising raising more tax revenue to meet its zero-deficit fiscal target for 2024 and is expected to gradually reimpose taxes through a new piece of legislation.
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