The Brazilian government intends to propose this year legislation to remove payroll tax breaks, Reuters reports.

The news agency quotes Finance Minister Henrique Meirelles as saying the government wishes to increase tax revenue to reduce its budget deficit.

The report says the government tried this year to remove the tax breaks by presidential decree, but that the congress blocked the decree.

The tax breaks are worth US$1.5 billion to the private sector, Reuters says.

Since 2011 the government, seeking to alleviate the effects of the global economic slowdown, has allowed companies in some industries to pay a tax of 1.5 percent or 2.5 percent on gross revenue instead of the 20 percent payroll tax.