BRASILIA — In a rally ahead of Brazil’s October 25 runoff, Senator Flavio Bolsonaro outlined a sweeping fiscal agenda that he says will protect workers and families from what he calls an “excessively high” tax burden. Bolsonaro, the eldest son of former President Jair Bolsonaro, told reporters that his team is studying constitutional amendments to revise key elements of President Luiz Inácio Lula da Silva’s consumption‑tax reform.
Tax reform review and payroll relief
“There are several constitutional amendments that are possible,” Bolsonaro said, citing the need to adjust the planned dual value‑added tax (VAT) that is slated to take effect next year. He argued that the reform’s effective VAT rate, estimated by economists at about 28%, would be too high for Brazilian workers.
Bolsonaro pledged to reduce payroll taxes, ensuring that “more of Brazilian workers’ income stays with them rather than the government.” He also promised to eliminate the 12% tax on crude‑oil exports that Lula’s administration introduced this year, calling the levy an “aberration” that harms the nation’s energy sector.
Broader fiscal changes
According to Daniella Marques, Bolsonaro’s top economic adviser and former member of Jair Bolsonaro’s government, a future Bolsonaro administration would review a broad range of tax measures enacted under Lula. Those include a dividend tax introduced in January, the Financial Transactions Tax (IOF) on corporate credit operations, foreign‑exchange transactions, and certain private‑pension investments.
Marques noted that the previous administration had only proposed taxing dividends alongside a reduction in corporate income taxes, suggesting that a more comprehensive review could ease the tax load on businesses and individuals alike.
Debt‑relief program
In addition to tax policy, Bolsonaro said his government would address Brazil’s near‑record household‑debt levels. He proposed that the state‑owned lender Caixa Econômica Federal purchase delinquent consumer debt and refinance it, giving borrowers access to new credit lines for small‑business financing.
Lula’s campaign also includes a debt‑purchase program, with the government planning a November auction to buy up to 150 billion reais of overdue loans at steep discounts. Bolsonaro’s plan mirrors this approach but emphasizes faster relief for over‑indebted families.
Political context
Bolsonaro’s fiscal platform comes as he prepares to face incumbent President Lula in a runoff after outperforming expectations in the first round. While Lula’s platform stresses “tax justice” and the elimination of tax distortions, Bolsonaro frames his proposals as necessary corrections to protect family incomes and promote economic growth.
Both candidates have pledged to lower the tax burden, but Bolsonaro’s emphasis on constitutional amendments and the removal of specific levies marks a clear departure from the current administration’s strategy.
What voters can expect
Should Bolsonaro win the presidency, his administration would likely move quickly to propose the constitutional changes needed to modify the VAT structure, cut payroll taxes and repeal the oil‑export levy. The proposed debt‑relief measures would be implemented through Caixa Econômica Federal, aiming to reduce household debt and stimulate small‑business activity.
Brazilian voters will have the chance to weigh these proposals against Lula’s continuation of the consumption‑tax reform and his own debt‑relief plan in the upcoming runoff.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
