Tax reform is the word of the day in Brazil
Tax reform is priority of the three ministries that administer the real economy: Finance (MF), Planning and Budget (MPO), and Development, Industry, Trade and Services (MDIC). Bolsonaro had united these three to form the Ministry of Economy, which concentrated too much decision power in just one person. Lula has rearranged these ministries to act as separate entities, just as before.
This means that the Industrial Policy is back on the agenda. This is important as Brazil is currently facing a severe industry crisis and is not the driving force contributing to the country’s GDP (it was once the main force, but now is behind services and farming sectors). Vice-President Geraldo Alckmin, the captain of MDIC, is putting all his chips into the green economy.
While Lula empowered three heavy politicians with important ministries, it has also made room for fights for protagonism. Let’s remember that Simone Tebet disputed the past Presidential election, and both Haddad and Alckmin were in the race in 2018. Alckmin also almost won in 2006, losing only to Mr. Lula in the second round. At this point in time, with Lula pledging that he will not go for a fourth term, all three names are in the run.
The success of these three ministries will depend on Lula’s ability to make them work together for a common objective, hence the tax reform.
At Speyside Group we have analyzed the economic landscape in Brazil and identified the main agendas and challenges ahead of the country’s administration. This report contains a brief local analysis of the Ministries of Finance (MF), Planning and Budget (MPO), and Development, Industry, Trade and Services (MDIC), along with the sector trends and opportunities that 2023 will bring to Brazil.
Download the report here: New Government: Finance agenda