Rapporteur confirms that he will withdraw Fundeb and the Constitutional Fund of the DF from the new tax rule

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The Senate rapporteur for the new fiscal rule, Senator Omar Aziz (PSD), confirmed that he will remove Fundeb and the Constitutional Fund of the Federal District (FCDF) from the scope of the rule. Also known as the fiscal framework, the new rules seek, in general, to limit the growth of government expenditures to the growth of revenues. Outside the rule, the two funds may grow above this limit from one year to the next. Fundeb is the Basic Education Maintenance and Development Fund: it is the sector’s main source of financing. The FCDF, on the other hand, is intended for investment in security, health and education in the DF, as it houses the country’s capital. DF parliamentarians estimate that, if the FCDF remains within the framework rule, Brasília will lose R$ 87 billion in 10 years. Changes to the text, which has already been approved by the Chamber, should lead the project to be appreciated again by the deputies. The government would like to resolve the procedure already in the Senate. Period of inflation Aziz also informed that he has not yet defined which period will be considered for the calculation of inflation that will serve as the basis for the application of the new fiscal rule in 2024. In the text approved by the Chamber, the period is 12 months closed in June 2023 But there are proposals within the Senate for the period to be closed in later months, such as November 2023. The mayor, deputy Arthur Lira (PP-AL), is against this change.

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