Tax framework: Chamber will study each of the exceptions – 04/20/2023 – Market

Expenditure exceptions included in the fiscal framework presented to Congress by the federal government should be one of the points of attention of the rapporteur for the text in the Chamber, Cláudio Cajado (PP-BA).

The deputy claims that he has not yet had time to address the issue, but that he is open to all suggestions and that he will not prevent changes to the text, if necessary.

“We are going to analyze it deeply. There are exceptions that are contained in the Constitution and others that were added. We are going to see each one of these exceptionalities and we are going to study them to have a mature position that meets what the project proposes: the balance of public accounts,” he said this Thursday (20).

As anticipated the Sheet, the government included in the proposal a list of 13 exceptions to the expenditure limit – such as the investment made by the National Treasury in non-financial state-owned companies. There is an assessment that certain concepts similar to those in the list should also be considered.

The interpretation exists even after the market reaction to the list of measures excepted from the spending cap (similar to the current spending cap, which will be revoked with the implementation of the new framework). Despite this, the government plans to act so that the modifications do not open the door to the multiplication of exceptions.

“I can’t say at this point if the text will be tougher or less tough, what I can say is that we are going to deeply study the set of articles that make up the project and make the changes [necessárias]”, added Caja.

The deputy was announced this Thursday by the mayor, Arthur Lira (PP-AL), as rapporteur in the House. In the Senate, the favorite to take care of the newsroom is Davi Alcolumbre (União Brasil-AP).

Cajado temporarily commanded the PP after Senator Ciro Nogueira (PI) resigned from the party presidency to occupy the Civil House ministry in the government of former President Jair Bolsonaro (PL).

The fiscal milestone is the government’s bet to replace the spending ceiling, a rule in force in the country that limits the increase in expenses to the inflation of the previous year. The mechanism is criticized by the Executive on the grounds that it restricts investment capacity.

During Bolsonaro’s management, the ceiling was relaxed a few times, including to allow for increased spending during the Covid-19 pandemic.

The new fiscal framework sent by the government predicts that the real increase in expenditure, above inflation, will be equivalent to 70% of the variation in revenues – ensuring a floor of 0.6% and a ceiling of 2.5% of real growth in spending per year.

The design was designed so that expenses have a real increase (above inflation), but at a more moderate pace than the increase in revenues.