Haddad compares reform to ‘Tax Constituency’ – 06/29/2023 – Market

The Minister of Finance, Fernando Haddad, said this Wednesday (28) that the favorable impact of the tax reform will be huge for Brazil and compared it to a ‘Tax Constitution’. “This is not reform. We are creating a new system,” he said.

“You could say: she’s great? I say: she’s good in the direction of great”, he said in an interview with Míriam Leitão, on Globonews. According to him, it is a reform that can be perfected in a period of ten or 20 years.

For Haddad, the country has turned into a tax chaos, which creates insecurity for taxpayers and public managers. “This isn’t good for anyone. It’s not good for the state, it’s not good for the market, therefore it’s not good for the functioning of the economy.”

The minister stated that the reform will put an end to the tax war and the “confusion” of exemptions and exemptions without social impact. For him, the impact of the reform should not be underestimated and it will pave the way for the next rounds of changes.

He downplayed the concern of the service sector with the changes. “The majority is in Super Simples, which is not affected. Another large part is health and education, which receive specific treatment”.

Haddad repeated that Brazil is lagging behind the world in many respects and that the country’s tax system is the worst in the world.

“It is an update of what needs to work better, not least because Brazil has great growth potential for several reasons, ranging from geopolitics to the issue of ecological transition”, he evaluated.

When talking about the possible decrease in tension after the majority of the Copom (Monetary Policy Committee) of the Central Bank sees space for starting a “parsimonious process” of cutting interest rates in August, according to the minutes published on Tuesday (27), the Minister acknowledged that technical divergences are normal and that it is natural to think that thinking different from his is ideological and not technical.

When assessing his own performance at the Treasury, the minister said he was confident and defended that the country should take advantage of the moment when the window is open for growth.

He defined the last decade (2013-2023) as very difficult for the population. “I think we can get out of this trap, which is much more political than economic in nature. It’s much more about us understanding each other and aligning the purposes of each power”.

CAR PURCHASE

Also in an interview with Míriam Leitão, Haddad had already anticipated the expansion of the program that grants discounts to the purchase of “popular” cars to continue stimulating sales in the automotive sector.

President Luiz Inácio Lula da Silva (PT) will invest another R$ 300 million in the program. The government had already made R$ 500 million available for the purchase of light vehicles with rebates, an amount that should now rise to R$ 800 million.

The information was confirmed by Sheet with members of the Treasury and the Ministry of Development, Industry, Commerce and Services.

According to government officials, an amount of BRL 80 million will be released within the initial limit of BRL 500 million and will be exclusively sold to individuals.

Another R$ 220 million will be released for sale to the general public (including individuals and companies), but will be subject to the reduction of revenue losses in collection.

In an interview to the press, Haddad stated that, to compensate for the new values ​​of the program, an additional three cents will be needed in the reencumbrance on diesel this year. According to him, the final value should be around R$ 1.8 billion.