Brazil's unpopular leader faces resistance on tax hike: poll

BRASILIA (Reuters) - President Dilma Rousseff’s popularity remains in the single digits in the midst of recession and most Brazilians are not willing to pay more taxes to help her plug a gaping fiscal deficit, according to an opinion poll published on Tuesday.

Brazil's President Dilma Rousseff speaks during a news conference with her Finnish counterpart Sauli Niinisto (not pictured) at the Presidential Palace in Helsinki, Finland, October 20, 2015. REUTERS/Jussi Nukari/Lehtikuva

The CNT/MDA poll showed that 80.6 percent of respondents believe Rousseff is unable to pull the country out of its worst economic slump in 25 years, and 86.7 percent do not want to pay higher taxes to help recover its overdrawn finances.

In particular, the poll found that 70.5 percent of Brazilians oppose her government’s plan to revive a tax on financial transactions known as CPMF as it strives to compensate for falling tax revenues.

Most Brazilian lawmakers opposed revival of the tax that the government says it needs to erase the deficit in its primary budget balance and avert a second downgrade to junk status by another major credit rating agency.

The primary budget balance shows how much revenue is available to meet interest payments, and as such is closely watched by investors as a gauge of a country’s capacity to service its debt.

Even if Rousseff’s government is able to squeeze out a small primary surplus after two years of deficits, its overall budget balance is sky-rocketing at 9 percent of GDP.

Her government’s approval rating barely budged in October, edging up to 8.8 percent compared with 7.7 percent in a previous survey in July, while 70 percent rate her government negatively compared to 70.9 percent in the previous survey. The variation is within the margin of error.

The latest poll did not ask respondents whether they favored the impeachment of Rousseff that her opponents are seeking in Congress.

But 69.2 percent of them said they believe Rousseff is to blame for the massive bribery and kickback scandal that has engulfed state-run oil company Petrobras and ensnared dozens of her political allies in a corruption investigation.

No fewer - 68.4 percent - blame former president Luis Inacio Lula da Silva for the corruption. Once Brazil’s most politician by far, the poll showed Lula would be handily defeat by opposition leader Aecio Neves if he ran again in 2018.

The survey by pollster MDA, commissioned by the national transport lobby group CNT, polled 2,002 people Oct. 20-24 and has a margin of error of plus or minus 2.2 percentage points.

Writing by Anthony Boadle; Editing by W Simon and Chizu Nomiyama