With the resumption of the casting vote, the government estimated to raise R$54 billion; the consolidated value in 2024 is R$83 million
An audit of the TCU (Federal Court of Auditors) states that the result of the return of the quality vote in the Carf (Tax Appeals Administration Board) in 2024 is “frustration” for the Union. According to the technical staff of the Court of Auditors, the mechanism resulted in the collection of R$83.4 million for public coffers. Read the full of the judgment (PDF – 308 kB).
The amount is well below the initial projection of the Ministry of Finance, which in the text of the Ploa (Annual Budget Bill) included revenues of R$54.7 billion from Carf. In July, the government reduced the revenue expectations with the resumption of the casting vote to R$37.7 billion, but the actual amount until August 6 is only 0.22% of the estimate for the year.
The rapporteur of the case, Minister Jhonathan de Jesus, said that the amount reached with the mechanism has a high potential to frustrate the government’s fiscal target. The plenary of the Court of Contests forwarded the ruling to the federal government.
“The ministers of the Federal Court of Auditors agree to alert the federal Executive Branch about the risk of not achieving the fiscal target for the 2024 financial year, considering the uncertainty surrounding the revenue estimate resulting from the casting vote of the Administrative Council of Tax Appeals, the potential impact of any frustration of this revenue on the primary result and the low revenue collection observed to date”says the ruling.
The audit points out that the frustration in revenue collection is caused by the slow procedures of the Carf and that the government should have anticipated the internal procedures of the Council before estimating a large revenue collection for this year.
The scenario for 2025 is more positive, as the delay in analyzing processes involving resources estimated for this year could boost next year’s accounts.
“There is a gap between the judgment and the filing of appeals: for example, there is a 60-day gap between the judgment and notification of the person responsible and another 90-day gap between the decision to opt for the most advantageous payment; therefore, it is not possible to say for now when the appeals will be filed, but, in any case, it seems plausible to believe in the rollover effect to 2025”says the TCU.
WHAT IS CARF
Carf operates as an administrative court that judges cases related to the payment of taxes. It has representatives from the Union and taxpayers.
In 2023, the government managed to reinstate the council’s casting vote. This means that, in cases of a tie in trials, the tax authorities would have the deciding decision. Historically, the deciding vote tends to go to the federal government.
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.
The government wants spending in 2024 to be equal to expenditure. In practice, it is necessary to cut spending and increase revenue. The problem is that little has been done to save money, only to increase revenue.
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