July 12, 2019
1. Chamber of Deputies approves Pension Reform
On Wednesday, the Chamber of Deputies voted to approve the basic text of the pension reform, Brazil’s primary political goal for 2019. The support for the initiative – 379 representatives in favor – surprised even the administration, who believed they would only get a few votes over the 308 required for approval. Representatives still need to go through two additional processes before sending the amendment proposal to the Senate. The first is to review the changes proposed by the parties. The second is to vote once again on the same proposal that was approved earlier this week. The voting process’ rigidity comes as the result of the reform’s status as a constitutional amendment. Among other changes, the approved pension reform raises the minimum age for retirement to 65 years old for men and 62 years old for women. Brazilians will also have to contribute to the pension fund for a minimum of 15 years before retiring. Before the changes, men had to contribute for 20 years while women had to contribute for a minimum of 15 years. Read more about the political consequences of the pension reform’s approval in the Brasília Report.
2. Bolsonaro plans to make his son ambassador to the U.S.
President Jair Bolsonaro is planning to name his son Eduardo Bolsonaro as Brazil’s next ambassador to the United States. The president has said that the nomination is pending only his son’s approval. Eduardo, who is currently a federal representative and President of the Chamber of Deputies’ Foreign Affairs Committee, said to the press that he would step down from his position to take the job in Washington, and is ready “for the mission given to him by the president”. Opposition parties are already working to block the nomination. They are planning on presenting legislative proposals to parliament or taking the matter to the Federal Supreme Court.
3. Cadastro Positivo – the Positive Credit Database – comes into effect
As of Tuesday, automatic inclusion into the Positive Credit Database has begun. The credit score system now automatically includes consumers and their credit information into a database of “good borrowers”. The goal is to make credit cheaper in Brazil and reward consumers who are not in debt with lower interest rates. With the new law, the financial system will be able to generate the list without consumer approval. However, those who do not want their personal information shared on the database can ask to have their names excluded from the list at any time. The bill is awaiting presidential approval, which is expected to happen via a presidential decree.
4. Economic Freedom bill moves ahead in Congress
On Wednesday, the Congressional Joint Committee – consisting of representatives and senators – approved the text for the Provisional Measure on Economic Freedom. The bill was sent to parliament in April 2019 by Jair Bolsonaro’s administration and establishes rules to make the economy less bureaucratic. One of the key proposals involves removing the requirement for permits to undertake low-risk activities. Another is to reduce the bureaucratic process for start-ups and small companies. Members of Congress have also added a number of proposals to the bill, such as creating a simple electronic document for cargo transportation and allowing some businesses to work on Sundays and during holidays. The bill will now be discussed by the Chamber of Deputies and then move on to the Senate.
G1: Comissão aprova relatório da MP da liberdade econômica
UOL: Comissão especial aprova relatório da MP da Liberdade Econômica
Valor Econômico: Bolsonaro comemora avanço no trâmite da MP da Liberdade Econômica
5. With pension reform on the way to approval, tax reform next on the docket
After the pension reform is fully approved – which should happen in September – some politicians are considering presenting tax reform as the next major political project. Chamber of Deputies President Rodrigo Maia and Senate President Davi Alcolumbre have already authorized special committees to discuss the new Brazilian tax model. The economy team, led by Minister Paulo Guedes and Federal Revenue Secretary Marcos Cintra, also plan to present a version of the reform. There are at least five legislative proposals for tax reform currently in Congress. Even though the proposals are different, they all aim to facilitate compliance for both companies and taxpayers.
Click here for the Brasilia Report, a weekly analysis prepared by JeffreyGroup Senior Advisor in Brasilia, Gustavo Krieger.