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Brazil lower house overrides Bolsonaro veto on payroll tax break extension

BRASILIA, Nov 4 (Reuters) - The lower house of Brazil’s Congress on Wednesday overrode President Jair Bolsonaro’s veto of an extension to payroll tax exemptions for 2021.

Lawmakers voted 430-33 to override the presidential veto of continued tax breaks in 17 labor-intensive sectors of the economy next year.

The Senate is expected to vote later on Wednesday to sustain the override that will cost the government an estimated 10 billion reais ($1.7 billion) in tax revenue next year.

Lawmakers said the veto would have led to layoffs and cause unacceptable unemployment already critical due to the coronavirus pandemic.

Bolsonaro vetoed the extended tax breaks to avoid the loss of revenue needed to plug the budget deficit. Talks with lawmakers to link the ending of the tax exemptions to a proposal for a new financial transaction tax failed, the government’s leader in Congress, Senator Eduardo Gomes, told reporters.

$1 = 5.6499 reais Reporting by Maria Carolina Marcello; Editing by Sandra Maler

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