Haddad says tax spending has reached an “absurd level” in the country

Minister Fernando Haddad, of Finance, said this Friday (5) that the reversal of the decision by Minister André Mendonça, of the Federal Supreme Court (STF), will help to clean up at least a quarter of public accounts, which reached a “level nonsense” of tax expenditures.

The speech took place in relation to the suspension of the injunction that had prevented the government from charging the Corporate Income Tax (IRPJ) and the Social Contribution on Net Profits (CSLL) of tax benefits granted by states through the Tax on Circulation of Goods and Services (ICMS). The collection can yield up to R$ 90 billion to public coffers.

“Tax spending in Brazil has reached an absurd, unenforceable level. We are no longer able to promote tax expenditures as we have been doing for seven, eight years. This is making public finances unfeasible. We are talking about the reversal of a quarter of that to clean up the finances for the country to grow again”, he said in an interview with CBN radio.

According to the minister, companies “have to profit not by evading taxes, but with robust profits from well-structured projects”. However, Haddad recognized that the collection of taxes will not prevent companies from finding other “accounting maneuvers” to “dribble” taxation, such as “overestimating their investments which, in fact, are subsidized by the Union”.

Finally, he said that the ministry will carry out strict inspections to prevent companies from finding new ways to avoid taxation.