Bolsonaro extends Brazil payroll tax breaks for two years

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BRASILIA, Nov 11 (Businesshala) – Brazilian President Jair Bolsonaro plans to extend the payroll tax exemption for 17 sectors of the economy for another two years, sacrificing government revenue to avoid double-digit unemployment Can you

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Bolsonaro announced the extension on Thursday after meeting representatives of the private sector, which will benefit.

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Payroll exemptions cover the most heavily worked sectors such as civil construction, textile and footwear manufacturers, transport and communication firms.

Many businesses threatened layoffs if the exemptions first given in 2014 were left to expire at the end of 2021.

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According to the official statistics agency IBGE, in the three months since August a record number of Brazilians have been completely out of the workforce and the unemployment rate was 13.2%.

Economy Minister Paulo Guedes and his team, struggling to find fiscal resources to avoid deepening Brazil’s budget deficit, have opposed the expansion, which is expected to cost at least 8 billion reais ($1.48 billion) annually. Estimates.

In exchange for a tax exemption, Bolsonaro asked business leaders he met through Congress to support legislation to ease financial constraints.

The proposed constitutional amendment, approved by the lower house on Tuesday, would allow the government to spend an additional 92 billion ($16.5 billion) next year, allowing it to double social welfare spending ahead of elections.

Lower house lawmakers are also considering a bill, already approved by the finance committee, that would extend the payroll tax exemption for four years until 2026.

$1 = 5.3989 Resis Reporting Writing by Lisandra Paraguassu Writing by Anthony Bodle Editing by Brad Haynes and David Gregorio

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