Lula’s government presents a new fiscal rule; 13 out-of-limit expenses

The federal government released this Tuesday (18) the proposal for a new fiscal framework with 13 items that may be left out of the spending limit starting next year. As a result, expenses excluded from the new rule may grow above the actual increase limit, which ranges from 0.6% to 2.5% per year. According to the project, this “real expenditure growth interval” is foreseen for the years 2024 to 2027.

Among the expenditures that were left out of the fiscal framework, are extraordinary credits, as already occurred in the expenditure ceiling; some transfers to municipalities; transfers to pay for the nursing floor; between others.

President Luiz Inácio Lula da Silva (PT) and the Minister of Finance, Fernando Haddad, should deliver the text to the National Congress later this afternoon.

The following expenses will not be included in the calculation base and therefore will not be limited by the new tax rule:

1. Constitutional transfers to states and municipalities;
2. Supplements for basic education in states and municipalities;
3. Extraordinary credits;
4. Transfers to state and municipal health funds for compliance with the nursing floor;
5. Expenses with socio-environmental projects or related to climate change funded with donations, and expenses funded by agreements signed as a result of environmental disasters;
6. Expenses – which are funded with own income, donations or agreements – of federal universities and institutions, public companies providing services to federal university hospitals, and other scientific, technological and innovation institutions;
7. Expenses incurred with funds arising from transfers from other entities of the Federation to the Union intended for the direct execution of works and engineering services;
8. Expenses with agreements for the payment of precatorios with a discount;
9. Expenses with Fundef writs owed to states and municipalities;
10. Non-recurring expenses of the Electoral Court with holding elections;
11. Expenses with capital increase of non-financial and non-dependent state-owned companies;
12. Legal transfers, to states and municipalities, of funds obtained from forestry concessions and the sale of Union properties;
13. Expenses related to the collection for the management of water resources by the National Water and Basic Sanitation Agency (ANA).