The 2023 Budget proposal, sent today(31) to the National Congress, provides for R$ 80.2 billion in tax reductions and tax incentives for the next year. Most of the impact on the Budget corresponds to the extension of the tax exemption on fuel, which will bring a drop of R$ 52.9 billion in collection.
Of this total of R$ 52.9 billion, R$ 34.3 billion correspond to the extension of the reduction of the Social Integration Program (PIS), the Contribution for the Financing of Social Security (Cofins) and the Contribution for Intervention in the Economic Domain ( Cide) on gasoline, ethanol and vehicular natural gas (CNG). The extension of the PIS/Cofins reduction on diesel, cooking gas and aviation kerosene will cost R$ 18.6 billion.
Tax breaks
Tax incentives are also planned for specific sectors of the economy, which will prevent the government from collecting R$ 17.2 billion next year. The main ones are the reduction in the rates of the Additional Freight for Renewal of the Merchant Marine (AFRMM), which will cost R$ 2.4 billion; the new decree on the Tax on Industrialized Products (IPI) for the automotive sector in the Manaus Free Trade Zone, with an impact of R$ 1.7 billion; and the reduction of Cide for remittances abroad, in the amount of R$ 1.5 billion.
The bill provides for two more exemptions. The first is the reduction of the PIS/Cofins rate on financial income, with an impact of R$ 5.8 billion. The second is the extension of Taxation on Universal Basis (TBU) with deferral (deferred payment), with an impact of R$ 4.2 billion on next year’s budget.
Revenues
The exemption of R$ 80.2 billion was the main responsible for the fall in the Union’s revenues in the next year. When comparing with the Gross Domestic Product (GDP, sum of goods and services produced in the country), government revenues will fall from 18.2% in 2022 to 17% in 2023.
This will cause the government to have a primary deficit of 0.6% of GDP next year, according to the original budget proposal, but the negative result could remain at 1.1%, if the National Congress makes the minimum value of R $600 for Brazil Aid.
public servants
The 2023 Budget proposal will allocate R$ 14.2 billion for the adjustment to federal public servants. Of this total, R$ 11.6 billion will correspond to the Executive Branch, including health, education and security employees in the Federal District, whose salary is supplemented by the Constitutional Fund of the Federal District.
According to the Ministry of Economy, the reduction in the number of civil servants in recent years has helped to create space for granting increases to civil servants. According to the folder, the total number of servers dropped from 630,689 in December 2018 to 569,217 in June this year. The statistics do not include the employees of the Central Bank or the Brazilian Intelligence Agency (Abin).
Income Tax Table
According to the presidential message sent today (31) to the National Congress, the correction of the Income Tax table will be debated in 2023, during the discussions of possible tax reforms. “Another priority of this Government is the reduction of the impacts of income tax on taxpayers, despite not being considered in this budget proposal for 2023”, highlighted the message. “Over the last few years, debates about the need for advances and adjustments in the national tax system have matured, so we will seek to build consensus with parliament and society to implement the reform and the respective correction of the income tax table. ”
Since 2015, the Income Tax table has not been corrected. Those who earn up to BRL 1,903.88 per month are exempt. Above this amount, rates of 7.5% are charged for the income range from R$1,903.99 to R$2,826.65; 15% for the portion between R$2,826.66 and R$3,751.05; of 22.5% for the range from R$3,751.06 to R$4,664.68; and 27.5% for the portion exceeding R$4,664.68. Considering the official inflation estimate of 7.2% in 2022, the accumulated lag reaches 61.6%.
Brazil aid
The Budget project stipulated at R$ 405 the average amount of Auxílio Brasil to be paid next year to serve 21.6 million families. The program will have a budget of R$ 105.7 billion for next year, with an increase of R$ 16.7 billion in relation to 2022.
The proposal sent to Congress also included a presidential message on Auxílio Brasil. According to the text, the matter will be discussed with the National Congress because maintaining the benefit at R$ 600 requires the approval of a proposal to amend the Constitution.
“The federal government recognizes the relevance of the aforementioned public policy and the importance of continuing that increase for the families served by the program. In this sense, the Executive Branch will make efforts in search of legal solutions and budgetary measures that allow the maintenance of that amount in the year 2023 through dialogue with the National Congress to meet this priority.
The Gas Aid, which is being paid in double this semester, will once again be worth 50% of the average price of a 13-kilogram cylinder. The project allocates R$ 2.2 billion to the program, with an increase of R$ 446 million compared to 2022, to serve 5.68 million families.
Rapporteur’s amendments
The 2023 Budget will reserve BRL 19.4 billion for rapporteur amendments. According to the Ministry of Economy, the measure meets the determination of article 13 of the Budget Guidelines Law (LDO).
Sanctioned on the 10th by President Jair Bolsonaro, the 2023 LDO maintained the rapporteur’s amendments. However, the president vetoed an article that gave control of the execution of these amendments to the Legislative Power, giving back to the Planalto Palace the power to define the commitments (spending authorizations).
