Bolsonaro speeds up payments to the poor as election looms.
President Jair Bolsonaro on Tuesday rolled out a radical new program aimed at simplifying the tax code, lowering taxes and cutting government spending as he tries to overcome a bruising election defeat and the challenge of governing from the capital.
The program is called “Regime Change” and is a direct response to the poor living conditions that have plagued Brazil for years as a low-wage economy that exports commodities and services.
The measure announced Tuesday is meant to benefit the poor by getting them out of poverty as Bolsonaro, who has championed a populist, nationalist agenda during his first years in office, seeks to win election in October in a second full term.
The president is in the midst of what polls suggest will be one of the biggest electoral drags of his second presidential term, making him an awkward and divisive leader and giving rise to renewed calls for him to step down.
Bolsonaro, who campaigned on promises to reduce poverty and help the poor and those who have lost work to automation, announced that he will be rolling out his own tax reform, the first major policy initiative he will take as president.
The president said the measure will cut more than 1,000 taxes, including a “big” tax on the sale of assets and a new tax on digital platforms. He said the new tax laws will cost the government about $10 billion in 2018 and $18 billion in 2019.
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The tax changes aim to end Brazil’s longest running fiscal crisis that began in 1992 when the government imposed a high tax on business profits to finance social programs. The new measure would remove that tax and provide the funding the government has said it needs to boost public spending.
Bolsonaro has campaigned on a platform of giving people money directly and telling them how to spend it, but has failed to put his plans into practice.
Brazil is one of 11 countries that has a fiscal deficit and the government faces the task of financing an economy that is growing at around 2%, but still has a large current account gap.
Bolsonaro said the government will release a report on Tuesday to “clear