After TCU pointed out ‘overestimated’ revenues, Tebet says he checked forecasts and considered the Budget ‘plausible’

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In a report, the Federal Court of Auditors stated that the revenue estimate projected by the economic team is ‘much higher’ than that seen in previous years, and that the government could have a loss of R$55 billion in 2024. The economic team’s goal is to reach zero deficit this year. The Minister of Planning, Simone Tebet, during a hearing in Congress in October 2023 Bruno Spada/Chamber of Deputies The Minister of Planning, Simone Tebet, stated this Thursday (18) that the Ministry of Planning checked, in July 2023, the revenue estimate for 2024 projected by the Ministry of Finance for this year’s Budget proposal and considered it “plausible”. Tebet made the statement after being questioned by journalists about the report from the Federal Court of Auditors (TCU) which pointed out the existence of “overestimated” revenues and the possibility of a R$55 billion shortfall this year – contrary to the government’s target of zero the primary deficit in public accounts. The primary deficit occurs when tax revenue is below government spending (without considering interest payments on public debt). Revenues, therefore, are essential for meeting the fiscal target. “With regard to what was presented to us by July 31st, and which appears in the Budget, the Ministry of Planning and Budget checked one by one the revenues presented by the Treasury and we saw that it was plausible. Therefore, we included it in the budget “, declared Tebet. In an interview, the minister stated that changes approved by Congress in 2023 brought down the revenue estimate, and that the government will carry out a survey of the measures. “Every time Congress makes changes, it changes this balance, so much so that it changes it more or less. In this case, it changed it less in terms of revenue”, she stated. Tebet also declared that the government can veto sections approved by Congress in this year’s Budget until January 22nd. “[Vamos] to know about the country’s growth, revenue growth and what to do, we haven’t finalized the balance sheet yet, we are discussing and analyzing vetoes, we have a deadline of January 22nd to forward a possible veto to the Annual Budget Law”, he said. The executive secretary of the Ministry of Finance, Dario Durigan, stated that the TCU report will be analyzed, but that members of the economic team are “confident” as they believe that the 2024 Budget, approved by Congress, “is closed with a balance of revenues and expenses.” It is necessary to preserve last year’s major decisions in Congress, which were reflected in a balanced budget. This year we will execute this action plan made by Congress, pursuing compliance with the budget, which allows a balance between revenues and expenses”, declared the number 2 of the Treasury. Experts and financial market agents have considered the goal of the ” overestimated” in the Budget Law Project (PLOA) made by the federal government and approved by the National Congress in December. “The Union’s Annual Budget Law Project for the 2024 financial year, the estimate of the Net Federal Primary Revenue at 19.2% of GDP is much higher than what was observed in recent years, indicating that it is overestimated, which leads to the possibility of having a primary deficit of up to R$55.3 billion and non-compliance with the fiscal result target proposed in the LDO Project for 2024 “, mentions the report. The report also points out that the expectation of first net revenue of 19.2% of GDP is “optimistic” and does not seem to be feasible, as it deviates from the average pattern of recent years and fits into the second highest historical peak since 1997 . For the Court, the methodology used by the Executive Branch to calculate new revenues was not presented in the PLOA, “creating doubts regarding the real collection capacity of legislative innovations”, that is, of the new proposals sent by the government and approved by Congress to try eliminate the deficit. “The government expects to increase revenue in 2024 through several measures whose consequences are not yet very clear or predictable, such as the re-encumbrance of the payroll, the taxation of offshore companies, the end of the JCP tax deduction (interest on equity ), among others”, details the TCU.

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