In September, officials from Lula da Silva's administration had said they would submit this proposal to Congress if federal revenue projections for the second half of 2024 fell short.
The Brazilian government has shelved a proposal to tax large technology companies, partly due to concerns that the measure would be seen as a response to U.S. President Donald Trump's tariff threats, two officials with knowledge of the matter told Reuters .
Instead, the sources, who spoke on condition of anonymity, said the Brazilian government will focus on advancing a separate bill to regulate competition among major digital platforms in Latin America's largest economy.
The legislation, which was put up for public consultation in January 2024, aims to combat business practices that stifle rivals, such as "killer acquisitions" and giving a company's own products or services priority in search results.
In September, government officials said they would submit a tax on large global technology companies to Congress if federal revenue projections for the second half of 2024 fell short.
The measure would affect US-based tech giants such as Amazon, Alphabet's Google, and Meta, the owner of Facebook and WhatsApp.
One of the sources said the administration has become cautious about the timing of sending such a bill to Congress, where it cannot be certain how quickly it would move. Raising taxes on such high-profile US companies could complicate trade talks driven by Trump's tariff proposals, the source added.
The official noted that Brazil remains unaware of Trump's plans for April 2, when he has promised to sharply raise U.S. tariffs to match those of other countries.
On Monday, Trump said that not all of the threatened tariffs would take effect on April 2 and that some countries could receive exemptions, which Wall Street hailed as a sign of flexibility after weeks of market turmoil.
Trump has called Brazil's tariffs on ethanol unfair. Brazilian Finance Minister Fernando Haddad said last week that his government expects lengthy tariff talks with Washington, while Brasilia is pushing to combine negotiations on sugar and ethanol.
