*A joint congressional committee has approved a ‘medida provisória’ (MP) issued by Brazil’s President Luiz Inácio Lula da Silva in June which proposed revenue-boosting measures. An MP is a type of decree that takes immediate effect and is valid for up to 120 days but needs to be reviewed by a joint congressional committee and then approved by both plenary chambers for the measures to continue beyond the 120-day period. The MP passed by the committee yesterday relates to the financial operations tax (IOF) and other taxes that Lula increased in May and then amended in June. Lula signed two pieces of legislation to adjust IOF rates in June, a ‘decreto’ (decree) and the MP. The decreto was overturned by congress but was later partially restored by the supreme court (STF) in July. Yesterday’s approval of the MP could mark a boost for the fiscal package that Lula issued in June, although the legislation has been watered down from its original form. For example, the MP proposed a tax rate of 12%-18% on some of the income of online betting companies, but the congressional committee removed this provision. Now that the committee has approved it, the MP will face votes in the main chambers of the lower house and senate.
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