By Marcela Ayres
BRASILIA (Reuters) – A strike by Brazil’s federal tax agency over wage demands is undermining government efforts to raise revenue through tax settlements, the workers’ union said, with nearly 15 billion reais ($2.6 billion) pending last year due to the dispute.
President Luiz Inacio Lula da Silva’s administration, which relies heavily on increased revenue to improve public finances, has projected 31 billion reais in tax settlements in this year’s budget proposal, which still needs approval in Congress.
That target has been met with broad skepticism since a matching projection was made for 2024, but the government ended the year raising just a fraction of that, or 5.4 billion reais.
The scenario deepens fiscal uncertainties while external risks rise from U.S. President Donald Trump’s trade policies and domestic economic growth slows under tight monetary policy.
The National Union of Tax Auditors (Sindifisco Nacional) told Reuters that 14.6 billion reais in tax settlements were nearing completion late last year but remain stalled by the strike, which began in late November.
That exceeds the 13 billion reais the government collected in 2024 from taxing closed-end investment funds, a measure it struggled to pass in Congress to curb benefits for the wealthiest.
“Tax auditors are eager to return to work, as the economic impact is clear, and we do not want further negative consequences,” said union president Dao Real.
“But we expect greater effort from the Finance Ministry to pressure the Management Ministry into honoring its agreement with Sindifisco Nacional and negotiating a recovery of accumulated wage losses.”
The union has demanded a wage adjustment for inflation since 2016, with accumulated inflation exceeding 50% since then.
Neither the Finance ministry nor the Management ministry immediately responded to requests for comment. The tax agency declined to comment.
($1 = 5.8194 reais)
(Reporting by Marcela Ayres in Brasilia; Editing by Matthew Lewis)
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