LatinNews Daily - 10 May 2024

*Brazilian government ministers, including Finance Minister Fernando Haddad, have negotiated an agreement to ease the tensions with congress over payroll tax breaks for 17 sectors. The tax benefits will be maintained for the rest of 2024 but will be gradually phased out from 2025. A tax rate of 5% has been agreed for 2025, which will be raised to 20% in 2028. Amid efforts to boost its tax revenue, the government has sought to end the tax benefits which were first created in 2011 and have been renewed several times over the past decade. In November 2023, President Luiz Inácio Lula da Silva vetoed a bill to renew the tax breaks, sparking tensions with congress which have been escalating for months, with congress overturning the veto in mid-December, to which Lula responded by ending the tax breaks by decree at the end of last year. Despite this latest breakthrough in negotiations over payroll tax breaks for companies, the senate president, Rodrigo Pacheco, has highlighted that federal government officials, leading lawmakers, and local mayors still need to agree on payroll tax rates for public sector employees in municipal authorities – another element in the bill which was rejected by Lula last November.