FILE PHOTO: The Paulista Avenue is seen in Sao Paulo, Brazil April 26, 2024. REUTERS/Amanda Perobelli/File Photo
RIO DE JANEIRO/BRASILIA (Reuters) -Brazil's Senate on Tuesday approved a bill maintaining tax incentives for the meetings and cultural events sector until the end of 2026, which now needs President Luiz Inacio Lula da Silva's approval to become law.
The bill, which had already been approved by the Lower House, sets a total cap of 15 billion reais ($2.89 billion) for post-pandemic tax benefits granted to the event industry through the so-called PERSE program, valid until the end of December, 2026.
PERSE benefits a large range of segments involved in the events industry in Brazil, including conferences and meetings producers, as well as movie theaters, bars and travel agencies.
In December, Lula's administration introduced an executive order aimed at limiting benefits across various sectors and ensuring fiscal compensation, including a significant downsizing of the PERSE program, targeting its elimination by 2025.
The measure, which required subsequent approval by Congress, was strongly rejected by lawmakers, complicating the economic team's efforts to achieve the fiscal target of erasing the primary deficit this year.
The leftist government then started negotiating some kind of limitation to the program, which resulted in the bill that was approved by Senate unanimously.
Brazil's Finance Minister Fernando Haddad told journalists in Sao Paulo the government tax income loss from extending PERSE is estimated at 5 billion reais per year, less than half of the amount government had forecast with earlier versions of the bill.
"This places PERSE in line with the budget approved in 2023 for 2024", he said, thanking Senate and Lower House chiefs for the approval.
($1 = 5.1936 reais)
($1 = 5.1936 reais)
(Reporting by Pedro Fonseca in Rio de Janeiro and Marcela Ayres in Brasilia; additional reporting by Patricia Vilas Boas in Sao PauloWriting by Andre RomaniEditing by Steven Grattan, Matthew Lewis and Lincoln Feast.)
