Industry says measures are “bad”, banks see fiscal balance
Paulo Skaf, Chairman of São Paulo state's Federation of Industries (Fiesp), criticized the government's decision to bring back the CPMF tax (Temporary Contribution on Financial Transactions, in a literal English translation), aimed at boosting revenues in 2016. The bill will have to be approved by the National Congress.
In Skaf's view, the measures announced “are bad for society.” In an interview held at Fiesp's headquarters, Skaf described the fiscal adjustment as a “mirage.”
“The government didn't cut its own flesh, there was no transparency or clarity while the measures were presented, and new taxes were created. The CPMF has already been rejected by the Federal Senate,” Skaf remarked, adding that “the CPMF will take its toll on everybody's pockets.”
In Skaf's view, cuts are actually not more than “sources of funding transferred.” He believes no real compromise was made on the government's part.
Banks
The Brazilian Federation of Banks (Febraban), in turn, said the moves “reflect the government's commitment to promote fiscal balance, a necessary condition to pave the way for the recovery of the longed-for growth in the country's economy.”
The $5.7 billion slash in spending “is a major sign of the recovery of economic agents' trust and the future resumption of investments.”
As for the return of the CPMF tax, the federation understands that raising taxes is a necessary addition to the cuts. “[We] believe that the levy on financial transactions, due to its vast coverage, low inflationary impact, simplicity, and swift implementation if compared to other taxes, makes it easier to balance public accounts as the government devises structural measures aimed at regulating expenditures. The temporary nature of this tax should be associated with tax rates lower every year to mitigate the distorting effects of taxation on financial mediation,” the note reads.
Translated by Fabrício Ferreira
Fonte: Industry says measures are “bad”, banks see fiscal balance
