Low growth is afflicting, says Tebet, in a letter read at a BNDES seminar – ISTOÉ DINHEIRO

Tax reform and a responsible fiscal rule would allow for sustainable economic growth, without inflationary pressures or an increase in public debt, defended this Tuesday, 21, the Minister of Planning and Budget, Simone Tebet, in a letter read during the seminar “Strategies for Sustainable Development for the 21st Century”, promoted by the National Bank for Economic and Social Development (BNDES) in partnership with the Brazilian Center for International Relations (Cebri) and the Federation of Industries of the State of São Paulo (Fiesp), in Rio de January.

Amid discussions among specialists on how the prolonged maintenance of the high level of the basic interest rate, currently at 13.75% per year, has raised concerns about the slowdown in economic activity, Tebet stated, in the letter, that the “low growth economic” in Brazil afflicts, but he avoided attacking monetary policy, preferring to defend tax reform and fiscal responsibility.

“But how can we make our economic growth reach a high level, in a sustainable way, without putting pressure on inflation or high public debt? How to reactivate the GDP on new bases, in a low-carbon economy, which bets on the most modern forms of growth?”, questioned Tebet, in the text, to suggest tax reform and a clear and reliable fiscal rule as solutions.

The minister defended the tax reform as “fundamental” to provide Brazilian competitiveness in the global economy and facilitate the business environment within the country. Tax simplification would help “to provide a productivity shock”. “By making the lives of taxpayers, individuals and companies, simpler, we will be giving the country a productivity shock. We will spend fewer hours a day and days a year trying to understand how to pay taxes and fees. We will reduce the huge burden of tax litigation. The country will be more agile and the overall cost will go down”, she defended.

According to the minister, it is necessary to reactivate growth “without ever neglecting responsibility for public accounts and controlling inflation.”

Mentioning the issue of fiscal rules, Tebet defended that inflation imposes a greater cost on the poorest. “President Lula is well aware of the harm that inflation does to the pockets of the poorest, workers, mothers, everyone. It was no wonder that in his two previous administrations he spared no efforts to keep it always within the Central Bank’s targets”, wrote the minister. “A good fiscal rule is one that, without neglecting the country’s necessary objectives, conveys credibility to the government’s fiscal policy. It’s the one that everyone trusts works,” she declared.

Tebet made a defense of the Fiscal Responsibility Law, as an example that gave “great respect to the conduct of public accounts, even without being in the Constitution”.

“We can and must make the functioning of the State more efficient and this can be done with clear, transparent, credible rules that do not involve frequent constitutional changes”, he defended. “The pullbacks promoted by the previous government deteriorated the agents’ perception of fiscal policy. From default to precatories to exacerbated spending in the election year. This has a price, which everyone pays: and the poorest always suffer the most”, criticized the minister.