BRASILIA, Feb 20 (Reuters) - Privatization of Brazil's largest power utility Centrais Eletricas Brasileiras SA , a key step for Brazil to meet its 2018 fiscal target, will be difficult for Congress to approve this year, sources in the government's economic team said on Tuesday.
They also doubted the elimination of payroll tax breaks awarded by the previous government will win approval.
One of the officials, who asked not to be named because he was not authorized to speak about the matter, said it was difficult but not impossible.
He added that the government might have to give up on other issues, referring to some 15 policies that the government plans to put on the front burner after giving up on an unpopular pension reform bill that failed to raise enough support in Congress in an election year.
They range from closing tax breaks to strengthening the Central Bank's autonomy and giving regulatory agencies more muscle, a set of policies designed to reassure investors that the government's reform program is still on track.
Privatization of Eletrobras, as the company is known, faces open resistance in Congress. The government hopes to raise 12.2 billion reais from the process. The proposal to end payroll tax breaks to improve revenue has been stuck in Congress for months.
A second source in the economic team said ending the tax breaks was opposed by industries that will put pressure on lawmakers as they campaign for re-election in October. (Reporting by Marcela Ayres; Editing by Matthew Lewis)