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Congress to Skip Break for Tax, Pension Bills
June 26, 2003
Brazil's President Luiz Inacio
Lula da Silva said lawmakers agreed to skip a July recess to vote on his
pension and tax bills, as company executives said proposals for tax
simplification would also increase levies on business.
Lula called on lawmakers to
speed up consideration and passage of the bills, which are aimed at
reducing the budget deficit and ensuring Brazil can keep up payments on
$400 billion of debt. He said he expects both measures to pass by
The tax and pension bills are
need to spur economic growth and ``create the jobs that we want to
create,'' Lula said in a speech at the presidential palace in Brasilia.
Lula is counting on a quick vote
on both bills, as he struggles to quell resistance to parts of the plan
from unions, state governors and members of his own party over. Today,
businessmen led by Jorge Gerdau, chairman of steelmaker Gerdau SA, aligned
with critics, saying the tax bill would increase the amount collected by
the government in taxes, levies and contributions to 40 percent of gross
domestic product next year from 36 percent of GDP in 2002.
``This means having to work
Mondays and Tuesdays for the government -- that's ridiculous,'' said
Alexandre Garcia, a TV Globo anchor who, alongside Gerdau, hosted the
event in Brasilia's Hotel Nacional. More than 200 executives joined the
event, called ``Tax Reform, Yes; Increase in Tax Burden, No!''
During his presidential
campaign, Lula said the tax bill would only aim at simplifying a system of
about 50 different levies, charges and taxes on companies. Administering
the taxes, imposed at various stages of production and sale, is costly for
both companies and the government.
Lula's bills would combine
separate state taxes on goods and services into a single value added tax,
leaving to congress the decision where it should be charged -- at the
point of sale or production.
``That's terrible, because the
government will take decisions that suits best to its interests at our
expense,'' Vanderlan de Souza, a director for Quirinopolis, Brazil-based
Vascafe SA, a coffee processor, said.
Gerdau and other industry
leaders, including National Industry Confederation President Armando
Monteiro Neto, will meet Finance Minister Antonio Palocci to deliver their
proposals to fine-tune the bill.
Both the senate and the lower house usually take a July recess of at least three weeks. Senate President Jose Sarney and deputy Joao Paulo Cunha, as president of the lower house, can cancel the break to speed up consideration of key congressional initiatives.