BRASILIA (Reuters) – Brazilian President Luiz Inacio Lula da Silva has decided to veto a bill which was set to extend a payroll tax exemption to some 17 sectors until 2027, the country’s official gazette showed late on Thursday.
The move comes as the government searches for ways to increase its revenue in order to improve public accounts, with the goal of erasing its fiscal deficit by next year. The bill, passed by lawmakers in October, could have harmed those efforts.
Reuters had reported on Thursday, citing two sources familiar with the matter, that the leftist leader would veto the bill.
In a message sent to Senate President Rodrigo Pacheco justifying his decision, Lula argued that extending that tax exemptions originally set to expire on Dec. 31 was unconstitutional and goes against the public interest.
Lula’s veto, however, could still be overturned by the Congress. For that, absolute majorities in both the lower house and Senate would have to vote to override it.
(Reporting by Lisandra Paraguassu; Writing by Peter Frontini; Editing by Kylie Madry and Steven Grattan)
