Tax framework can be approved by the 10th, says Lira – 04/18/2023 – Market

The mayor, Arthur Lira (PP-AL), said this Tuesday (18) that the text of the new fiscal rule to replace the spending ceiling can be approved by the next May 10th in the House and that the difficulty of the government in setting up a base of parliamentarians does not hinder the processing of the text.

According to the deputy, although the text requires 257 votes to be approved, the deputies will seek the support of 308 parliamentarians – the same level required for constitutional changes. Lira also said that the rapporteur will be announced on Wednesday (18).

The statement was given after a meeting with President Luiz Inácio Lula da Silva (PT), and ministers Fernando Haddad (Finance), Geraldo Alckmin (Industry), Simone Tebet (Planning and Rui Costa (Casa Civil).

The executive secretary of Finance, Gabriel Galípolo, and Senator Veneziano Vital do Rego (PSB-PB), vice-president of the House, who represented Rodrigo Pacheco (PSD-MG) also attended the meeting.

Questioned whether the Lula government’s difficulty in setting up an allied base in the Chamber could disrupt the text, Lira said: “In the framework, no.”

“[Na reforma tributária] It is also another national issue and other interests will make it difficult or facilitate. It will depend on our ability to vote on a fair framework,” he added.

The tax reform is the second major government project to be voted on by Congress later this year. Lira himself referred to the new fiscal rule as an “anteroom” to the tax one.

The government has chosen in its new fiscal framework the full-year 2023 inflation to readjust the base of the expenditure cap for 2024, adopting an option that gives extra relief for next year’s expenditures compared to the scenario in which the indicator up to the mid-year (accumulated in 12 months) was chosen.

Until 2021, the spending ceiling predicted that the limitation would grow based on inflation accumulated in the 12 months ending in June. That year, however, the then Minister Paulo Guedes (Economy) articulated a change through a constitutional amendment to consider the period from January to December (more advantageous at the time) and make room for more spending.

In its proposal for a new fiscal framework, the government could choose the correction basis – as the spending cap will be revoked. And it decided that the expenditure limit for the Executive and the other Powers in 2024 will be based on the 2023 figures plus inflation to be verified throughout the year (in addition to the real growth in expenditures, which will be between 0.6% and 2 .5%).

The choice for this mechanism favors expenditures in 2024 because the IPCA (National Consumer Price Index) has been lower than expected and should continue to slow down until mid-2023, before accelerating again in the second half of the year. The accumulated in 12 months ended in March, for example, was 4.65% – while the market forecast for the full year is 6.01%.

Until then, the government indicated that the calculation for the real growth in expenses would be made using numbers up to the middle of the year (based mainly on the accumulated net revenue in the 12 months ended in that period), but without the detail of how the calculation would look. of inflation. The text now brings the operation.