RIO DE JANEIRO, July 21 (Xinhua) -- Brazilian President Michel Temer said on Friday that he understands the criticism to the tax hike announced by the government, but reiterated the necessity of the measure.
The Sao Paulo Industry Federation, an association of industrial leaders which usually supports Temer, released an official statement criticizing the tax hike and saying that raising taxes at a moment when the economic activity is only beginning to resume will make the crisis worse.
"It is a normal reaction, as no one wants more taxes. But I am sure this will pass when everyone realizes this is essential to boost growth, reach the fiscal target, and give stability to the country," said the president, who is attending a Mercosur summit in Argentina.
Temer added that no other tax hikes are in the government's plans for the near future, but noted that it is not off the table. "I do not know whether more raises will be necessary. Naturally there will be conversations about that, but for now there will be no more," he said.
The Finance and Planning ministries announced on Thursday that the government will increase tax on gasoline, diesel and ethanol to raise about 10.4 billion reais ( 3.3 billion U.S. dollars), while freezing 5.9 billion reais (1.9 billion U.S. dollars) in federal spending this year, in a latest effort to cut its long-standing budget deficit.
