The Partido dos Trabalhadores (PT) government in Brazil has elected Dario Durigan as new Minister of Finance, who will lead the fiscal and taxation policy of South America’s largest economy under President Luiz Inácio Lula da Silva.

On Friday, Brazil’s gazette announced sweeping changes to the Ministry of the Economy and Finance (MEF), following the decision of Fernando Haddad to run for Governor in the state of Sāo Paulo.

The move brings a close to Haddad’s two-decade tenure as a leading figure within Lula’s PT Party, having served across multiple administrations and most recently as the architect of the party’s fiscal and tax reform agenda.

Speculation had intensified in recent months that Lula would back ‘Paulista Haddad’, a São Paulo native, to contest the governorship of his home state – a key political battleground to the PT’s national strategy.

São Paulo is regarded as a must-win contest in this year’s election cycle, with the PT party seeking to unseat incumbent governor Tarcísio Gomes de Freitas of Republicanos, a key right wing ally of former president Jair Bolsonaro, who currently holds a clear majority in the state. 

While Haddad enters the race as an underdog, his candidacy is expected to elevate his national profile. He will campaign under the PT banner in São Paulo, positioning himself as Lula’s chosen candidate to lead the government’s race and strategy for campaigning across Brazil’s 26 states. 

Dramatic shifts

Durigan, formerly Executive Secretary of MEF, will step into the role at a critical moment for Brazil’s economy. He is expected to maintain continuity on “fiscal discipline and tax reform” as Brazil heads into his electoral cycle this year. 

In 2026, it’s likely that we will see the PT party’s economic manoeuvers challenged by external pressures, including global energy shocks, continued inflation risks and trade tariffs imposed by the Trump administration. 

Haddad stepped down from the ministry after overseeing a period of significant transition for the Treasury, ensuring that the government’s fiscal policy is aligned with the PT party’s priorities following the economic policies introduced by the Bolsonaro government.

As Finance Minister, Haddad was a key architect of the Brazil Bets Law (No. 14,790/202 3), which formalised the regulatory framework of online gambling as of  1 January 2025.

Both Haddad and Lula have become more critical of the betting regime within its first year, however. The duo describe online gambling as a predatory industry that targets Brazilian consumers and undermines its wider economic policies. 

By late 2025, Haddad had pushed for taxes on licensed betting operators to be doubled to 24%, a proposal that was botched by PT ministers in Congress amid resistance from coalition and bloc partners. The setback forced a revision of core measures of the PT government’s Budget 2026, begrudgingly signed by Lula. 

Attacks on Bets have formed a part of a broader political and fiscal narrative ahead of Brazil’s general election on 4 October. Lula has already begun campaigning for what would be a fourth presidential term, sharpening rhetoric around increased taxation on “banks, betting and billionaires” — summarised in a PT slogan of the “tres-Bs”.

The transition at the Finance Ministry therefore signals not only continuity in economic stewardship, but a broader recalibration of Brazil’s political landscape – as fiscal policy, regulatory direction and electoral strategy become increasingly intertwined ahead of a defining national vote.

As it stands, Lula continues to intensify his critique of the Bets regime, maintaining pressure on Congress and the Senate to intervene in its design – primarily through higher taxes, increased licensing duties and stricter controls on advertising.

Lawmakers have already indicated direction, with the Senate agreeing to raise betting taxes to 18% by 2028, while debates have, for now, stalled the application of CIDE ‘technical services tax’, which backers seek to impose on the deposits of Bets licences. 

At the same time, proposals on gambling advertising remain unresolved, ranging from blanket bans to more targeted restrictions.

Though 2026 is an election year, the Brazil Bets framework is expected to undergo further modification, as pledged by both Congress and the Senate. However, the scope and final shape of reforms remain unsettled – leaving the long-term trajectory of the regime uncertain.

Who will battle Lula?

The electoral backdrop remains undecided on which right-wing candidate will oppose Lula. As former President Bolsonaro remains under house arrest and disqualified from campaigning, Brazil’s right wing has yet to consolidate behind a single challenger.

Rio Senator Flávio Bolsonaro, the son of Jair, has emerged as a leading contender, having secured his father’s endorsement to lead the Liberal Party (PL) ticket – yet questions remain on his campaigning credentials. 

Divisions stand across the conservative spectrum, with alternative calls backing Tarcísio de Freitas as a ‘unified right-wing candidate’ or the surprise choice of Michelle Bolsonaro.