Haddad defends proposal to forgive non-compliance with the framework

The Minister of Finance, Fernando Haddad, defended this Monday (24th) the proposal not to punish authorities that do not comply with the targets established in the new fiscal framework. Sent to the National Congress on the 18th, the supplementary bill makes contingencies (blockages) optional and removes sanctions, such as impeachment and ineligibility. The minister compared the proposed rules with the inflation targeting regime established by the National Monetary Council (CMN). If official inflation is above the target ceiling or below the floor, the president of the Central Bank (BC) is required to send a letter to the Ministry of Finance informing the reasons for non-compliance. “No one punishes the Central Bank for failing to meet the target. What I believe is that you have rules that make fiscal management more rigid. I don’t know of any country that criminalizes it. What’s the use of making a hard rule, like the spending cap, and then approving constitutional amendments and breaking the cap? Better to have a sustainable rule”, declared Haddad. The minister, however, did not rule out the possibility of Congress reestablishing the punishments provided for in the Fiscal Responsibility Law. The minister made the statement after meeting in the morning with the minister of the Superior Court of Justice (STJ) Benedito Gonçalves, who reports on a process of reviewing tax incentives for states that could increase Union revenue by up to R$ 90 billion. Gonçalves reports on a lawsuit that requests that the Tax on the Circulation of Goods and Services (ICMS) is no longer deducted from the calculation basis of the Corporate Income Tax (IRPJ) and the Social Contribution on Net Profit (CSLL) in the case of grants (financial aid) for funding. The government awaits the decision of the STJ to edit a provisional measure that maintains the benefit only for investments. “This has a very big impact on public finances, which are being eroded by a series of anomalous and completely illegitimate devices, which are eroding the State’s tax base. Which country in the world subsidizes funding? I don’t know of any examples. With that, a drain of almost BRL 90 billion was created”, said Haddad. The minister pointed out that the funding incentive resulted in hundreds of billions of losses for the federal government. “An amount greater than the entire MEC budget and equivalent to half of Bolsa Família is being judged”, highlighted the minister.

Agência Brasil