August 9, 2019


1. Chamber of Deputies approves Pension Reform anticipating R$ 933.5 billion (USD$ 236.9 billion) in savings

On Wednesday, the Chamber of Deputies approved the text for the Pension Reform in a second round of voting. It will now be sent to the Senate for approval. Among politicians, the approval was regarded as a victory for President Jair Bolsonaro and the President of the Chamber of Deputies, Rodrigo Maia. The final text approved by representatives could represent R$ 933.5 billion (USD$ 236.9 billion) in savings for the federal government over ten years. The Bolsonaro administration is optimistic about the Senate vote, believing they will get support from the majority of senators. Only after the vote approves the bill, will the reform come into effect. In order for the Reform to be approved, the President has to give in to pressure and provide funds to parliamentary amendments. Read the analysis of Bolsonaro’s administration and the approval of the Pension Reform at Brasília Report.

Folha de S.Paulo: Câmara aprova Previdência e governo obtém vitória
O Globo: Reforma aprovada na Câmara gera economia de R$ 933,5 bilhões
Folha de S.Paulo: Confira tudo o que foi aprovado até agora na reforma

2. Guedes dodges deal and writes his own bill for the Tax Reform

Economy Minister Paulo Guedes demanded his team focus on writing the bill for the Tax Reform, which will be submitted to Congress later this year. Guedes is dodging a deal made on Monday with Senate President Davi Alcolumbre and President of the Chamber of Deputies, Rodrigo Maia. The deal plans to send Congress a single bill representing the interests of everyone involved. The administration wants to submit a proposal combining five taxes (PIS, COFINS, IPI, CSLL and IOF) into a single tax and increase CPMF (Contribution to Financial Transactions). The Reform will also include changes to the Income Tax such as the decrease of maximum tax rates and an increase the number of tax-exempt categories.

Folha de S.Paulo: Equipe de Guedes faz texto próprio da Reforma Tributária

3. Federal Supreme Court vetoes Lula’s transfer to common prison

The Justice of Curitiba’s decision to transfer former president Luiz Inácio Lula da Silva to common prison was vetoed by the Federal Supreme Court by ten votes to one. The Justice had determined that Lula should be transferred from a Federal Police jail in Curitiba to a common prison – the Tremembé penitentiary – in the countryside of São Paulo. The Federal Police claimed to lack the proper structure or resources to keep the former president imprisoned for any longer. Lula is in an adapted room on the top floor of the building. The court also complained about the constant protests organized by people who support the former president. The Federal Supreme Court decided to keep Lula in Curitiba until a final decision is reached on a request made by his defense, which claims that the decisions made by former judge Sergio Moro (now Minister of Justice) are suspicious. Even Rodrigo Maia (DEM), President of the Chamber of Deputies, and other politicians from parties that are not allies of the Worker’s Party (PT), supported the pressure on the Federal Supreme Court to veto the ruling. The trial on Moro’s conduct is yet to be scheduled.

Valor Econômico: STF barra transferência de Lula para Tremembé

4. Number of companies offering flexible hours increases to 38%

Between 2017 and now, the number of Brazilian companies that offer flexible hours increased from 13% to 38%. The data is from the 12th Benefits Research, which interviewed 640 companies, amounting to over 2.3 million employees. The research analyzed 50 types of benefits offered to employees. With the rapid change of work profiles and new generations entering the job market, companies are increasingly offering their employees the option of working from home, increasing the time for paid maternity and paternity leave, and making their dress codes more flexible. For new mothers, paid maternity leave can be up to six months, two months over the legal requirement. New fathers can get up to 83 days, while the law requires only five. Out of all of the companies analyzed, 21% offer employees the possibility to work from home, compared to 17% in 2017.

Época Negócios: Cresce flexibilização de horários e benefícios nas empresas

5. Official inflation for the month of July is the lowest in five years

The Extended National Consumer Price Index (IPCA) – which is considered to be the official measure of Brazilian inflation – ended the month of July at 0.19%. It is the lowest monthly index since 2014, when it was at 0.01%. Since the beginning of the year, inflation increased 2.42% in seven months. Considering the past 12 months, the index dropped from 3.37% to 3.22%, remaining below the 4.25% inflation goal defined by the administration this year. According to the Brazilian Institute of Geography and Statistics, responsible for the IPCA, last month, the price of gas dropped 2.8%. Among the items that generated an increase in inflation was the cost of electricity. Electricity bills got, on average, 4.48% more expensive for consumers.

G1: Inflação oficial de julho fica em 0,19%, afirma IBGE

Brasilia Report

Click here for the Brasilia Report, a weekly analysis prepared by JeffreyGroup Senior Advisor in Brasilia, Gustavo Krieger.