Custo Brasil consumes R$ 1.7 trillion from companies – 05/17/2023 – Market

The so-called Brazil cost consumes R$ 1.7 trillion per year from the national productive sector, equivalent to 19.5% of GDP (Gross Domestic Product), according to a study released this Wednesday (17).

This value represents the additional expense that companies have to produce in the country, compared to the average cost in OECD (Organization for Economic Cooperation and Development) members.

The study was released by the MBC (Movimento Brasil Competitivo), which brings together businessmen, in partnership with the Ministry of Development, Industry, Commerce and Services.

The calculation of the Brazil cost takes into account the entire business lifecycle. The most recent indicators available in 12 areas identified as vital for competitiveness are evaluated.

The term Brazil cost is often used by economists and businessmen to define the tangle of structural, bureaucratic and economic difficulties that affect the development of business in the country.

“If we had the same conditions [da média da OCDE]the productive sector could save R$ 1.7 trillion”, says Rogério Caiuby, executive director of the MBC.

The first edition of the study was released in 2019. At the time, the Brazil cost was estimated at BRL 1.5 trillion per year (in values ​​at the time). The amount was equivalent to 22% of GDP.

Although the percentage has decreased in relation to GDP, Caiuby assesses that there have not been major advances in reducing obstacles in recent years. “We walked sideways.”

In the counselor’s view, the improvement of the situation depends on projects that take time to get off the ground. He mentions at least three main points for this improvement: qualification of the workforce, infrastructure and tax system.

Regarding the third, Caiuby defends the approval of a tax reform that simplifies tax collection. He recalls that the discussion about the project has dragged on for years in Brazil, but he considers that there is a more mature scenario for changes currently.

According to the study released this Wednesday, the time taken by companies in Brazil to commit to taxes is approximately 62.5 days, while the OECD average is six days.

In addition, 6 of the 12 axes analyzed in the survey represent more than 80% of the Brazil cost. They are: financing a business, employing human capital, having infrastructure, regulatory legal environment, integration of global production chains and honoring taxes.

The one with the greatest impact on national GDP, according to the survey, is employing human capital. This axis deals with the qualification of the workforce, labor charges and processes and legal charges. The low qualification of the workforce, points out the study, remains one of the obstacles.

On the infrastructure axis, the country managed to advance by more than 30% in broadband access since the previous survey, but still remains far from OECD levels, says the survey.