Moraes' decision on IOF delimits the powers of each branch of government, says Haddad.
The Finance Minister stated that the government will demonstrate to the Supreme Court that there was no linear increase in the IOF tax, but rather corrections of distortions.
Reuters - The decision taken this Friday by Supreme Federal Court (STF) Justice Alexandre de Moraes regarding the increase in the Tax on Financial Operations (IOF) seeks to delimit the powers of each branch of government, which is great for the country, said Finance Minister Fernando Haddad this Friday.
In a conversation with journalists in Rio de Janeiro, Haddad stated that the government will show the Supreme Court that there was no linear increase in the IOF tax, but rather corrections of distortions.
"We corrected what seemed to us to be wrong from the point of view of tax evasion. People who were using financial operations improperly were blocked by the decree. This has a regulatory purpose, with repercussions for revenue collection," said the minister.
Earlier this Friday, Moraes issued a preliminary injunction suspending the presidential decrees that raised the IOF tax rates, as well as the decision by the National Congress last week that overturned the initiative of President Luiz Inácio Lula da Silva's government.
The injunction also called for a conciliation hearing on July 15th with representatives from the government, the Chamber of Deputies, the Senate, and the Attorney General's Office.
"The decision aims to define powers more clearly. The clearer we are about the constitutional powers of each branch of government, the more easily a president will be able to govern, obviously subject to the laws of the country," he added.
The government estimated that overturning the measure that increased the IOF tax should generate a revenue loss of R$12 billion this year, which may increase the need for ministries to contain budget cuts in order to comply with fiscal rules.
