BRASILIA, July 25 (Xinhua) -- A Brazilian court dealt a blow to the government of President Michel Temer on Tuesday by suspending a government-proposed plan to increase fuel tax.
On last Thursday, the government said the price of fuel would increase by 0.41 reais a liter (0.13 U.S. dollars), with the objective of bringing in an extra 10.4 billion reais (3.28 billion U.S. dollars) of public revenue in 2017. This would have helped the government reach its target of lowering the country's deficit to 139 billion reais (43.7 billion U.S. dollars).
According to Economy Minister Henrique Meirelles, the rise is necessary to cover this yawning deficit, while he also did not rule out future tax rises.
Speaking on Monday to a group of businessmen in Sao Paulo, Meirelles said that "everything is possible, if it proves necessary. Right now, we are concerned about sources of income."
However, numerous business groups came out against the measure, saying it would slow down Brazil's economic recovery after more than two years of recession.
The opinion taken by federal judge Renato Borelli said that the tax increase should have been passed through a federal law, and not by an executive order.
"The adequate legislative instrument for the creation and increase of a tax is, without exception, a law," he wrote in his decision.
The government may appeal the decision to a higher court.
