Minister of Finance ratified the intention of the economic team to “correct” the tax system to obtain revenue
The Minister of Finance, Fernando Haddadsaid this Tuesday (4.Apr.2023) that the president of the BC (Central Bank), Roberto Campos Neto, identified distortions in the Brazilian tax system that add up to R$ 300 billion. According to him, the subsidy for the cost of companies would be among these obstacles.
“Yesterday I was talking to Roberto Campos Neto here in my office. He was saying that the distortions he identified with his team add up to R$300 billion”declared dduring event of Bradesco BBI.
In a critical tone, Haddad stated that they are “patrimonialist forms of appropriation of the Brazilian State” is that “half a dozen people are using an interpretation of some judges”.
According to the minister, there “lenient interpretation” in some cases. He further stated that “not all the tax system was built from legitimate systems”.
The minister stated that the economic team seeks to correct these distortions. “We are not talking about creating taxes, raising rates. We’re talking about making corrections that can be made by ordinary bill”he said.
The head of the economic team of the government of Luiz Inacio Lula da Silva (EN) said that “it is bringing very bad effects to the Brazilian economy. Just for you to have an idea, one measure represents 50% of the largest transfer program in the world, which is Bolsa Família”.
In the afternoon, Haddad stated that the government will issue an MP (provisional measure) to prevent companies with tax incentives granted by states from deducting the credit from the federal tax calculation base. According to him, the values can only be discounted if they are for investments, and not for funding.
The Treasury estimates an additional revenue of BRL 85 billion to BRL 90 billion with the measure.
multinationals
Haddad also said that taxation on the transfer price of multinationals “can resolve most of the distortions”. He claimed to have discussed the topic with US Treasury Secretary Janet Yellen back in January, when she addressed the issue for the first time when dealing with the estimated impact on public coffers.
“The whole world is adopting transfer pricing as a healthy measure. I believe transfer pricing needs to be adopted and approved.”he declared.
Economic growth
The minister said he believed that Brazil could experience a “sustainable growth” of GDP (Gross Domestic Product) from the 2nd half of 2023, after the approval of the new fiscal rule in Congress. “The international scenario will compete for Brazil to be a recipient of foreign investment”he declared.
Fernando Haddad also said that the echobrazilian economy “grew far below potential GDP” in the last 10 years. “We have been there since 2013 suffering from a mismatch”he added.
The minister said that “don’t give up” to fight inflation.
Minimum wage readjustment
The head of the government’s economic team stated that the policy for readjusting the minimum wage in the coming years should come before the approval of the fiscal framework and consumption tax reform. Haddad mentioned that he will take Lula “rules compatible with the fiscal framework”.
Union centrals, however, propose to increase the value of the minimum wage considering the inflation of the period measured by the INPC (National Consumer Price Index) and the variation of the GDP 2.4 percentage points more than the value of the previous year.
unrolls
According to Haddad, R$ 11 billion of the guarantee fund for the debt renegotiation program that will be launched by the federal government are already secured. The expectation is that the total value will reach R$ 15 billion.
“With BRL 15 billion, we managed to reach around 52 million CPFs, if there is a massive adhesion”he declared.
The Minister of Finance said that the MP for the program is already ready, but the government is waiting for the delivery of the software to publish it. He reinforced that the Union will subsidize those who receive up to 2 minimum wages per month.
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