Brazil’s lower house of Congress will vote in April on legislation to privatize state-controlled power holding company Centrais Eletricas Brasileiras SA, Speaker Rodrigo Maia said on Thursday.
Maia told reporters that approval of the sale of Latin America’s largest utility, known as Eletrobras, should be voted on in committee by mid-April and by the full house in the following two weeks.
Maia said he will fast-track a bill to abolish payroll tax breaks granted to businesses by the previous government, and it should be put to a vote within two weeks.
President Michel Temer’s government is counting on the approval of both bills to meet its fiscal target this year. The collapse of its efforts to push through an overhaul of the costly social security system has raised doubts about Brazil’s ability to bring its budget deficit under control and stop its massive public debt from snowballing.
Sources in Temer’s economic team told Reuters this week that the government might have to give up on other issues, referring to 15 policies it wants to enact after failing to win enough backing for the unpopular pension reform bill.
They range from closing tax breaks to strengthening the central bank’s autonomy and giving regulatory agencies more muscle, a set of policies designed to reassure investors that the government’s reform program is still on track.
Privatization of Eletrobras, as the company is known, faces open resistance in Congress. The government hopes to raise 12.2 billion reais from the process. The proposal to end payroll tax breaks to improve revenue has been stuck in Congress for months.
Maia said the lower house will continue to work on approval of austerity measures to keep Brazil’s fiscal adjustment on track. But he said lawmakers will not accept any new taxes.
Finance Minister Henrique Meirelles said on Wednesday that Brazil will have to raise taxes if it does not streamline a generous but costly pension system that has been the main driver of the government’s budget deficits for the last three years.