Fiscal target cannot be met without tax rise, gov't says
The primary deficit goal (spending larger than revenues, interest payments not considered) was set at $44.5 billion
Without raising taxes, the government would close out 2017 with excessive spending on health care and education and undermine efforts to deliver the year's fiscal target, Brazil's Finance Ministry stated in a report.
Last week, the government declared that the deficit in the budget under this year's fiscal target stands at $18.6 billion. The primary deficit goal (spending larger than revenues, interest payments not considered) was set at $44.5 billion.
Cuts cannot amount to the size of the budget gap, the statement explains. “First, the expenditure liable to a budget freeze is only the so-called discretionary expenditure. Mandatory expenditures (pay for active and inactive personnel, social security, among others) are not liable to cuts,” the report reads.
Discretionary expenditures cannot be the object of a budget freeze either, the report goes on, “as more than half of them are earmarked for health care and education, which are subject to their constitution minimum.”
Translated by Fabrício Ferreira
Fonte: Fiscal target cannot be met without tax rise, gov't says
