A Brazil federal tax agency strike, driven by wage demands, is hampering the government's tax settlements, with around 15 billion reais ($2.6 billion) pending last year due to the dispute, according to the workers' union.
President Luiz Inacio Lula da Silva's administration, reliant on increased revenue to bolster public finances, has set a target of 31 billion reais in tax settlements in this year's budget proposal, awaiting Congress approval.
Despite skepticism regarding the target, citing the previous year's shortfall where only 5.4 billion reais was raised against a 31 billion reais projection, the government's fiscal uncertainties are compounded by external risks from U.S. trade policies and domestic economic slowdown under tight monetary policy.
The National Union of Tax Auditors (Sindifisco Nacional) shared that 14.6 billion reais in tax settlements nearly completed last year are currently stagnant due to the strike initiated in late November.
Union president Dao Real stressed the urgency of the situation, stating, Tax auditors are eager to return to work, as the economic impact is clear, and we do not want further negative consequences. The union calls for increased efforts from the Finance Ministry to ensure the fulfillment of agreements, including negotiating a recovery from accumulated wage losses.
The union has been advocating for wage adjustments to offset inflation since 2016, given that inflation has exceeded 50% during this period.
Neither the Finance Ministry nor the Management Ministry has responded to requests for comments, while the tax agency has declined to provide any statements.
($1 = 5.8194 reais)