By Marcela Ayres
BRASILIA (Reuters) - Brazil's government on Wednesday postponed a much-awaited decision on potential budget freezes and tax hikes for this year, saying that the final numbers depend on upcoming court rulings that are expected to help the government raise revenues.
The government sees a large possibility of tax increases, Finance Minister Henrique Meirelles told journalists.
He added that the government is likely to freeze some spending as it tries to meet its budget target. However, the budget freezes will be "substantially smaller" than the 58.2 billion reais ($18.9 billion) shortfall the government had just announced in its bimonthly mandatory budget report, he said.
Meirelles said court decisions to be taken by next Tuesday could result in 16 billion reais in additional revenues for the government. In a bid to avoid unnecessary tax hikes or budget freezes, the government took the "extraordinary" decision to delay the budget measures, Meirelles added.
"A 58-billion freeze is not feasible," Planning Minister Dyogo Oliveira said in the same press conference.
The court decisions expected to generate additional revenues for the government include a Supreme Court ruling on Tuesday that revoked the license that granted Brazil's No. 3 power utility, Cia Energética de Minas Gerais SA (SA:CMIG3), to operate a power dam.
Brazil's primary budget deficit target for this year is 139 billion reais, but a weaker economic recovery has shrunk revenue. Earlier on Wednesday, the government cut its growth estimate for 2017 to 0.5 percent from 1.0 percent previously.
A Senate leader told Reuters on Tuesday that the tax increases under consideration include one on gasoline and another on financial operations called IOF.