The Brazilian Planning Ministry on Tuesday admitted that it “underestimated” the impact of a salary hike for federal workers by R$14.8 billion. Congress passed the salary hike on June 2 after administration officials said it would cost taxpayers R$52.9 billion in additional payroll costs through 2018. Tuesday, the Planning Ministry admitted the actual cost would be R$67.7 billion. The additional costs will make it harder for the government to meet its 2016 budget target, which calls for a primary deficit no higher than R$170.5 billion. The government admitted the “error” after independent accountants reviewed the text of the legislation establishing the salary hike.
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