Tax reform is a priority of priorities, says Haddad – 06/20/2023 – Market

Minister Fernando Haddad (Finance) said this Tuesday (20) that he will dedicate himself 100% to tax reform starting next week. According to him, the theme is the “priority of priorities” for the semester.

The government is trying to speed up the progress of the issue while it sees the vote on the new fiscal framework (a bill that replaces the current spending ceiling) already approved in the Chamber and with a vote forwarded in the Senate.

“As of Monday, I will be 100% available for us to advance in this agenda, which is the priority of priorities for this semester”, he said.

“In the event that we approve it in the Chamber before the recess, this will mean that we will provide conditions for the Senate to deal with the text in the second half and, who knows, if the two Houses continue to help Brazil, as they are, we will have a new tax regime in the country, entirely renewed”, he said.

Haddad declined to give details about the proposal to be presented by the rapporteur, Deputy Aguinaldo Ribeiro (PP-PB). But he said he hoped that the congressman’s opinion would be presented later this week –since, according to him, all doubts that reached the folder on the subject had already been answered–, after a meeting on Thursday (22) with the presence of governors and parliamentarians.

Haddad’s statements were given after a meeting with the mayor, Arthur Lira (PP-AL), at the headquarters of the Ministry of Finance. Minister Alexandre Padilha (Secretary of Institutional Relations) and the leader of the government in the Chamber, deputy José Guimarães (PT-CE) were also present.

According to the head of the economic team, the reform proposal received caution in relation to the impacts. “Many proposals from the past did not go through precisely because of a lack of caution. We learned from previous initiatives, we matured”, he said.

In his view, the merger of taxes that will result in IVA (Value Added Tax) will represent a significant productivity shock for the Brazilian economy in the coming years.

“And the indicators are already changing. We have good expectations of a drop in inflation, a resumption of growth, the prospect of reaching a moderate Selic rate at the end of the year and in 2024 already with an important economic impulse, which in my opinion will inaugurate a beginning of a sustainable cycle in Brazil,” he said.

Haddad had lunch this week with the president of the Central Bank, Roberto Campos Neto. Without giving details, the minister said that they would discuss the Brazilian economy and exchange information and arguments with the aim of converging.

“He presents arguments to me, I present arguments to him. Always in the sense of trying to converge. We have a personal and institutional relationship that requires periodic meetings that are done very naturally”, said Haddad.

At the end of the meeting, Lira indicated that the first week of July will be an “intensive week” in relation to the government’s economic agenda, indicating that the project that deals with the resumption of the so-called quality vote in Carf (Council Administrative Office of Tax Resources), the fiscal framework and tax reform.

According to the parliamentarian, the substitutive text of the PEC (proposed amendment to the Constitution), prepared by Ribeiro, is already ready.

“But as we asked and invited the governors from all over Brazil so that we could hold a meeting, it seemed to be inelegable for you to release a text today, when you are going to discuss with the governors precisely some issues that can still be improved in the text”, he said. Lira.

The president of the House also stated that with the release of the text there will be about 15 days “of much discussion” until it is taken to the plenary. “Hopefully, this text will not be released until Thursday so that everyone can criticize, comment, discuss, improve.”

In addition to the governors and respective state secretaries of the economic area, the extraordinary secretary for Tax Reform at the Ministry of Finance, Bernard Appy, and Padilha –Haddad will be in France accompanying President Lula on agendas.

“We are going to enter decisive weeks on the tax reform agenda, and the participation of the government, the participation of the Minister of Economy is important [Fazenda]the participation of the articulation, so that everyone arrives imbued with building a text that is feasible, both for the private sector and for the public sector”, said Lira.

When asked if Haddad would have signaled the value of the Union’s contribution to the FDR (Regional Development Fund), Lira said that the minister has discussed this with the rapporteur of the matter and that the topic should be discussed with governors on Thursday.

“I hope that this is a reform that we will reach the end with the approval. We know the difficulties, but the whole purpose, the propitious moment, Brazil needs and we will focus on that”, he concluded.