BRASILIA (Reuters – Brazilian President Jair Bolsonaro will extend the payroll tax exemptions for 17 sector of Brazil’s economy for an additional two years. He is willing to sacrifice government revenue in order to prevent double-digit unemployment from getting worse.

Bolsonaro, after having met representatives of the private sectors that could benefit from it, announced Thursday the extension.

Payroll exemption applies to many work-intensive areas, like civil construction and textile and footwear manufacturers, as well as transportation and communication firms.

Businesses threatened layoffs should the 2014 exemptions that were granted to them expire in 2021.

Brazilians are at an all-time high in unemployment. According to IBGE statistics, 13.2% of Brazilians were out of work during August.

Paulo Guedes, Economy Minister, and his team struggled to find fiscal resources in order to prevent Brazil from increasing its budget deficit. The extension is expected to be at least 8 billion Brazilian reais (1.48 billion dollars) per year.

Bolsonaro, in return for the exemption from tax, asked business leaders that he had met to back him to push legislation through Congress to relax fiscal constraint.

On Tuesday, the proposed constitutional amendment cleared the lower house. It would have allowed the government to allocate an extra 92 billion Brazilian reais ($16.5billion) for next year. This would enable it to increase its social welfare spending in advance of the elections.

The lower house is also looking at a bill which cleared the Finance Committee and would increase the exemptions from payroll taxes for up to four years.

($1 = 5.3989 reais)