Brazil's Finance Minister Fernando Haddad has addressed concerns from the market following a significant downturn caused by the announcement of a reform aimed at increasing income tax exemptions.

Haddad assured investors that the proposed measures would not have any fiscal impact and would only come into effect in 2026 if approved by Congress.

The minister's comments come at a time of increased volatility in the financial markets, as stakeholders react to the potential implications of the tax reform. By emphasizing fiscal neutrality, Haddad aims to alleviate fears about the impact on Brazil's economic stability and public finances.