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November 13, 2021
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Brazil Aid: minister says there is no permanent source of funding

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The Economy Minister, Paulo Guedes, said this Thursday (11) that everything was programmed for a Brazilian Aid of R$ 300, respecting the spending ceiling and that it would be sourced from funds arising from changes in the Income Tax (IR ). However, according to the minister, as the issue is at a standstill in the Federal Senate and President Jair Bolsonaro increased the amount by R$ 100, the program still does not have a permanent source of funding.Brazil Aid: minister says there is no permanent source of funding

“Under the tax liability law, within the ceiling and with the source that would be the IR. They blocked the IR, it was approved by the Chamber [dos Deputados], has not yet advanced in the Senate. Without the source, this does not allow the creation of a permanent program, so we were pushed towards a transitory program”, said Guedes, participating in the Itaú Macro Vision 2021 event.

Regarding the IR, Guedes refers to the taxation of the distribution of profits and dividends, included in the second phase of the Tax Reform conceived by the Ministry of Economy, which did not advance in the Senate.

“There was the issue of social sensitivity, which is that ‘let’s give 400 [reais]’, since it is not permanent, it gives a little more. We spent six, seven months saying that people were eating bones, that there was widespread famine, that people were helpless, the political pressure was immense on the economy,” he added.

The minister said that it was not his idea to expand the spending ceiling to guarantee resources for Brazil Aid. “The economy wanted to make R$300 within the budget, all right. THE [ala] politics by pressing R$600. The president cut it there and said R$400. Neither the R$600 nor the R$300, let’s create a transitory program. I warned at the time saying ‘this is going to be off the roof’”, he said.

resource source

The guarantee of the source of funds for the program also involves the proposed amendment to the Constitution (PEC) of Precatório, which would allow the payment of precatório in installments and would change the calculation of the spending ceiling, releasing R$ 91.5 billion for the next Budget year. Of this total, around BRL 50 billion would be used to fund the increase in the benefit to BRL 400.

THE PEC was approved in the Chamber of Deputies, on Tuesday night (9) in the second round. The text goes on for analysis by the Senate, where it also needs to be approved in two rounds, with at least two-thirds of the votes in favor.

“the senator [Rodrigo] Pacheco committed himself, because the PEC of the Precatório, 80% of it was made in his house. We sat there, the [Arthur] Lira, he, I sat down and talked about it and drew the structure. So he made a commitment with us to put it to a vote.”

The minister said that now it is necessary to find a permanent source for the program. “I would carry out an administrative reform now in the Chamber, I would try to approve the precatório in the Senate this year. next year we have [privatização dos] post office, we have [privatização da] Eletrobras, that’s no problem to do in January, February, March, what you have to approve now are the social programs, because they have to start running this year, you can’t create in an election year”, he said.

According to Guedes, the administrative reform and the approval of the Precatório PEC would maintain “the fiscal foundations solid”.

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