Brazil’s Bolsonaro considering minimum wage increase after leaked reports

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Brazil's President and candidate for re-election Jair Bolsonaro attends an election campaign at a settlement of rural workers in Brasilia

BRASILIA (Reuters) -Brazil President Jair Bolsonaro’s government is considering raising the minimum wage and civil servants’ salaries above inflation, Economy Minister Paulo Guedes said on Tuesday, but he denied intentions to end middle class tax benefits.

The remarks, made at a virtual event on cooperativism, took place ahead of an Oct. 30 presidential election runoff vote in which right-wing Bolsonaro trails former leftist President Luiz Inacio Lula da Silva in polls.

Folha de S. Paulo newspaper last week reported the government was studying whether to end a constitutional obligation to adjust the minimum wage annually by at least the previous year’s inflation, news that negatively hit Bolsonaro’s campaign.

On Tuesday, the O Estado de S. Paulo newspaper reported on Tuesday that studies by the ministry proposed abolishing the ability to deduct medical and education expenses from income tax. Such a measure would mainly affect the middle class.

In both cases, Guedes acknowledged the existence of internal studies but attributed their preparation and leakage to Lula’s Workers Party (PT) members who work in the ministry.

“On the eve of elections, they leak studies that were discarded,” he said.

PT did not immediately respond to Reuters’ request for comment.

The minister stressed that Bolsonaro’s administration wants to approve a tax reform that reduces the burden on the poorest and taxes profits and dividends.

Later on Tuesday, the Economy ministry said in a statement that supposed studies, analyses, essays and opinions produced by the technical areas of the cabinet could not be “incorrectly taken as proposals from the ministry or the minister.”

(Reporting by Marcela Ayres; Editing by Mark Porter, Josie Kao and Richard Pullin)

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