Fiscal Framework: receptivity was ‘very good’ and details will come over time, says Haddad

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Minister participated in a series of meetings in São Paulo this Friday (31) to discuss the new tax rules; new program for industry and measures for credit should be announced Fernando Haddad, Minister of Finance, presents a new fiscal framework this Thursday (30) Press Release/Diogo Zacarias /MF The Minister of Finance, Fernando Haddad, said this Friday (31 ) that the receptivity of the fiscal framework was “very good” and highlighted that the details of the new rules will be “equated over time”. In São Paulo this Friday, Haddad held a series of closed meetings with representatives from different sectors of the economy throughout the day to discuss the new rules that should replace the spending ceiling in the country. The framework was released the day before by the economic team, and aims to control public spending and make the Lula government come out of the red without taking money from the areas it considers essential – such as health, education and security -, in addition to guaranteeing resources for invest in works and projects that help the economy to grow. “The framework is just the beginning of a work to recover public accounts to broaden our planning and investment horizon”, said the minister in a press conference after the last meeting. READ MORE: Understand what the fiscal framework is, point by point Fiscal framework: economists highlight positive and negative aspects of the proposal proposed – Haddad reiterated that he should not introduce new taxes or increase current tax rates to increase revenue. The idea, according to the minister, is to recompose the tax collection by charging sectors that are “more affluent” or that are currently not taxed. “We are talking about what, in Brasilia, is called jabuti. These are laws that were often passed in the dead of night and that opened up a space for abuse, distorting the competitiveness of the Brazilian economy,” he said. The minister also highlighted that he received several demands from the representatives he met this Friday, reinforcing that many of them already fit within the new rule, such as, for example, the creation of a kind of Crop Plan for the industry. “Some programs aimed at this are already being designed, with a transparent budget heading, as in the Crop Plan, and universal service for both small and large producers”, said Haddad. He also highlighted the interest of institutions linked to the capital market in promoting the country’s reindustrialization. “The advantage would be the affordable interest, so that anyone who wants to produce and create jobs can do so without paying the exorbitant rates that we see in the market due to the interest set by the Central Bank. So there are a series of developments that are already starting to happen”, added the minister. Credit measures In line with the criticisms that the government has made over the last few months regarding the basic interest rate (Selic) and the Central Bank’s role in Brazilian monetary policy, Haddad also stated that he should release, in April, at least 12 measures in the credit area. “These are measures to improve the credit environment in Brazil. They range from endorsement to PPPs [Parcerias Público-privadas]which are large investments in infrastructure, go through debentures that do not pay income tax and go to guarantees that are given in the credit system to lower the spread [diferença entre a captação dos bancos e o juro cobrado na ponta]”, he stated.

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