Brazil: Banks highlight concern about new tax reform

The meeting between Finance Minister of Brazil, Fernando Haddad, and the CEOs of Brazil’s largest financial institutions, within the scope of the Brazilian Federation of Banks (Febraban), had a positive atmosphere. Almost all presidents of the 19 banks that make up the entity’s board of directors were present this Friday.

The meeting was reportedly requested by Haddad himself to Febraban President Isaac Sidney, to explain to the sector the government’s projects defended in Congress affecting capital markets, credit, and insurance. Sidney made an initial speech, Haddad also spoke, and Secretary of Economic Reforms Marcos Pinto went into detail on the eight mentioned projects.

In general terms, Haddad talked about fiscal measures, essentially focusing on reducing tax expenditures and making revenue collection sustainable. He received strong support from the banking sector, which highlighted its role in the government amidst pressures for increased spending from all sides.

Regarding tax reform, banks praised the project but emphasized the importance of regulation and expressed concerns about certain points. The main issue is the taxation on financial intermediation and the government’s promise of no net increase in revenue from the sector.

Haddad listened to the banks’ requests but did not give any indication of what he intends to do. Nonetheless, he committed to promoting prior and ongoing debates during the processing of the regulation projects for the reform, as he plans to do with other sectors as well.