Brazil Congress Threatens to Deal Fresh Blow to Lula Fiscal Plan

President Luiz Inacio Lula da Silva’s efforts to shore up Brazil’s budget are on the brink of another setback after Congress advanced a push to block tax increases on some financial transactions from taking effect.

Lower house lawmakers on Monday approved by 346-97 votes an urgency request to overturn a governmental decree raising so-called IOF taxes. The procedural move opens the door to the floor vote on a proposal to cancel the measure.

Luiz Inacio Lula da Silva

Photographer: Ton Molina/Bloomberg

Yet Speaker Hugo Motta, who initially supported the government’s plans before reversing course last week, has pledged to call such a vote in the ...