Brazil finance minister: government still undecided on new taxes

Finance Minister Henrique Meirelles said today (May 17) that no decision has been made on the return of the Temporary Contribution on Financial Transactions, known as CPMF, or any other tax. Any decision in that connection, he says, would prove hasty if made before the government can analyze real data from public accounts.

The proposal to bring back the tax is currently stalled in Congress. It was among the solutions devised by the previous government to balance out revenues and costs.

The finance minister once again noted that Brazil's tax burden is too heavy compared to emerging countries. “To look at figures and how comprehensive structural overhauls and changes are: Our priority is to bring the real situation [involving the figures] under scrutiny, and then take the necessary administrative measures,” he said. The next step, he added, is to submit other plans to Congress, like the constitutional amendment granting the Central Bank operational autonomy.

“[We intend] to regain confidence with a view to recovering growth as quickly as possible, and generate employment as quickly as possible. Because then we enter a new cycle—a cycle of employment, which should certainly also lead to an increase in the activity, a rise in tax collection and consumption. That should settle this whole equation in a more feasible manner,” he said.

Unemployment

During a press conference held today (17) to announce the members of the new economic staff, Meirelles went on to state that, if no measure were adopted to enhance the evolution of the public debt, win back confidence, and reverse the economic downturn, joblessness could affect as much as 14 percent of the population.

In the first quarter of the year, the unemployment rate stood at 10.9%—or 11.1 million people—in the first quarter of the year, according to the Brazilian Institute of Geography and Statistics (IBGE).

Regarding the report on revenues and costs, which should have its release announced by Monday (20) by the government, the minister did not mention numbers of the size of the economy necessary to meet the fiscal target.

Translated by Fabrício Ferreira

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