Haddad says it is illusory to think that administrative reform will have big expense cuts – 02/15/2023 – Market

The Minister of Finance, Fernando Haddad, said on Wednesday night (15) that the tax reform is more urgent than the administrative reform —which still has no forecast or prospect of being presented.

Haddad also stated that it is “illusory” to believe that the administrative reform will bring great results by cutting costs and that “some faucets” in the public service can be resolved through taxation.

“It is a little illusory to imagine that the administrative reform will represent great gains in cutting expenses”, stated the Minister of Finance, practically discarding the advance of this reform at the beginning of the government.

“You bypassing the problems, the faucets that open from the aid […] tax reform can decide on this, when it comes to income. Several distortions, several legal loopholes that are used for you to create trinkets, are subject to taxation on Income Tax. There are many ways to solve it. Administrative reform is one of them, but it is not the most organic. We have to fight fraud, fight tax expenses”, he added, speaking to businessmen.

On Wednesday night (15), the Minister of Finance participated in a dinner promoted by the Esfera Brasil group, of businessmen, at a residence in Lago Sul, in Brasília. He was accompanied by the executive secretary of the ministry, Gabriel Galípolo

Upon arriving for the event, the minister stressed the importance of approving the tax reform. He said that it is up to the National Congress to decide on its procedure, but that the government’s position will be fundamental to define the progress of the proposal.

The statement came about when he was asked about the effectiveness of the working group to debate the tax reform, which was set up by the mayor, deputy Arthur Lira (PP-AL).

“Congress is the one who has the last word, because it is an amendment to the Constitution. But, if the government pushes it, it will greatly favor the process,” he said.

Haddad also commented on the conclusion of the agreement related to the CARF (Administrative Council of Federal Resources), to free taxpayers from paying interest and fines in the event of a tie in administrative judgments involving tax debts. The government thus hopes to preserve the so-called casting vote, which guarantees the Treasury the maintenance of charges when there is a tie — even if the agreement means granting discounts on the payment of debts.

The negotiation, proposed by businessmen and endorsed by Haddad, seeks to avoid a government setback in the discussion of the economic package with the National Congress.

Before the dinner, the minister said that he would thank the businessmen for having sent to Congress what he described as the “agreement with the fiscal measures” proposed by the government. Haddad later told the businessmen that “nobody giving in to an agreement is not an agreement”, at the time he praised the solution.