Minister went to the Federal Court of Auditors and the agenda was the expectations of the fiscal target for 2024
The Minister of Finance, Fernando Haddadsaid this Wednesday (11.Sep.2024) that the government will review revenue projections with the casting vote of the Carf (Tax Appeals Administrative Council) in the next Bimonthly Revenue and Expenditure Assessment Report.
The injection of resources into the public coffers through these measures was underestimated in 2024. The estimate at the beginning of the year was an increase of R$55.6 billion. The government has already revised the forecast to R$37.7 billion in July. In other words, the money did not come in. The new revision indicates that the money will continue to not come in significantly.
Haddad signaled the change when speaking to journalists at the Finance Ministry in Brasília. He headed shortly after to TCU (Federal Court of Auditors), where he met with the president of the body, Bruno Dantas, to discuss the situation of public accounts.
A newspaper report S. Paulo Newspaper said that the TCU was preparing a technical note that showed the possibility of exceeding the zero deficit target in 2024 – which may have influenced the minister’s visit.
“If there are adjustments to be made, there is total openness to receive these complaints here in court”Haddad declared in Court after the meeting.
The government of Luiz Inacio Lula da Silva (PT) has taken on the goal of eliminating the public accounts deficit by 2024. In practice, they need to make spending equal to revenue. It is necessary to cut expenses and increase revenue.
During the PT’s third term, little was done to reduce spending. However, much was done to increase revenue. According to experts, this strategy is uncertain. Improvements in tax collection are based on estimates, while spending cuts are more accurate and predictable.
According to Haddad, the meeting at TCU had the following objective: “Present the flight plan to the technicians here at the Court by the end of the year”. One of the topics discussed was compensation for the payroll tax relief.
FRUSTRATION WITH CARF
Carf operates as an administrative court that judges cases related to the payment of taxes. It has representatives from the Union and taxpayers.
The government managed to reinstate the council’s casting vote in 2023. This means that, in cases of a tie in trials, the tax authorities would have the final decision. Historically, the deciding vote tends to go to the federal government.
According to Federal Revenuethe frustration in collection occurred because taxpayers who lose the trial have two options:
- accept payment and be able to pay off the debt in installments and avoid paying interest and fines;
- wait 90 days to decide whether to pay the fine or not, and appeal.
The number of taxpayers who chose to wait the 3 months increased beyond the estimated amount. In major tax negotiations, this represents an even longer period for funds to enter the Union.
Furthermore, the notification period for the court’s decision to be issued is 60 days, plus an additional 30 days for recalculation. In other words, it takes even longer for appeals to be filed.
“As of May, the volume of credits under this collection heading, that is, that the taxpayer has been notified and is within the deadline to accept or not, is increasing”declared the special secretary of the Federal Revenue, Robinson Barreirinhas, to journalists in July.
In 2023, when the Budget for the following year was released, the resumption of the Carf’s casting vote was one of the sources of revenue mentioned as a way of guaranteeing a zero deficit.
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