Brazil Is Now Delaying Tech Taxes Amidst Trump’s Tariff Threats.

Brazil is reportedly delaying the implementation of a significant tax on big tech companies as discussions surrounding tariffs with the Trump administration continue, according to informed sources.

In September, government officials announced plans to present a tax proposal targeting major global tech firms to Congress, contingent upon federal revenue projections for the latter half of 2024 not meeting expectations. The proposed measure is set to impact major technology companies based in the United States, including Amazon, Alphabet’s Google, and Meta, the parent company of Facebook and WhatsApp.

In a significant development, the Brazilian government has decided to put on hold a proposal aimed at taxing major technology companies. This decision comes amid apprehensions that such a move might be interpreted as a reaction to tariff threats made by U.S. President Donald Trump, according to two officials familiar with the situation who spoke to Reuters.

According to sources who requested anonymity, the Brazilian government is set to prioritise the advancement of a distinct bill aimed at regulating competition among the major digital platforms within the largest economy in Latin America.

In January 2024, a significant piece of legislation entered the public consultation phase, targeting business practices that hinder competition. This initiative addresses issues such as “killer acquisitions” and the preferential treatment of a company’s own offerings in search results.

In September, government officials announced plans to present a tax proposal targeting major global tech firms to Congress, contingent upon federal revenue projections for the latter half of 2024 not meeting expectations.

The proposed measure is set to impact major US technology giants, including Amazon, Alphabet’s Google, and Meta, the parent company of Facebook and WhatsApp.

According to a source, the government is exercising caution regarding the timing of introducing a bill to Congress, as there is uncertainty about the speed at which it would progress through the legislative process. Increasing taxes on prominent U.S. corporations may complicate the ongoing trade discussions initiated by Trump’s tariff proposals, according to a source familiar with the matter.

Officials have expressed uncertainty regarding Brazil’s awareness of Trump’s intentions for April 2, a date on which he has pledged to significantly increase U.S. tariffs to align with those imposed by other nations.

In a recent statement, Trump indicated that not all proposed tariffs would be implemented on April 2, suggesting that certain countries might be granted exemptions. This announcement was met with approval from Wall Street, which interpreted it as a sign of flexibility following a period of significant market volatility.

Former President Trump has criticised Brazil’s ethanol tariffs, labelling them “unjust.” In a recent statement, Brazilian Finance Minister Fernando Haddad indicated that the government anticipates protracted discussions regarding tariffs with Washington. The move comes as Brazil seeks to merge negotiations concerning sugar and ethanol into a comprehensive dialogue.