Brazil Speaker Motta Signals R$50 Billion Amendment Cuts in IOF Fiscal Standoff

Brazil’s Speaker of the Chamber of Deputies, Hugo Motta, said he is prepared to put about R$50 billion in parliamentary amendments on the table as part of a broader effort to shore up public finances, provided that any belt-tightening is shared across the Executive, Legislature and Judiciary. Motta also backed a review of tax exemptions but cautioned against what he called the “criminalisation” of lawmakers’ amendments, arguing they fund local projects nationwide. Motta’s overture follows a clash with President Luiz Inácio Lula da Silva’s government over the Imposto sobre Operações Financeiras (IOF). Congress last month revoked a presidential decree that would have raised the levy, which the Finance Ministry said could add R$20 billion to revenues this year. The government responded by asking the Supreme Court to reinstate the hike. On 4 July, Justice Alexandre de Moraes froze both the decree that increased the IOF and the congressional resolution that struck it down, calling the dispute an “undesirable stand-off”. He summoned representatives of all three branches to a conciliation hearing on 15 July to seek a negotiated solution. Despite the tension, Motta insisted “dialogue is prevailing” and said the Chamber remains willing to advance the Lula administration’s priority agenda, which includes a public-security constitutional amendment and an administrative reform. He added that fiscal restraint must not fall disproportionately on lower-income Brazilians.