Mayors back Rousseff in revival of former tax

President Dilma Rousseff welcomed Thursday (Oct. 22) representatives from the National Confederation of Municipalities (CNM), who showed support for the government's plan to restore the old CPMF tax (Temporary Contribution on Financial Transactions, in a literal translation), provided the rate is set at 0.38% and shared among the federal, state and municipal governments.

The proposal, submitted to Congress by the government in September, brings the old levy back with a 0.20% rate, earmarked for the social security Deficit. Governors and mayors said they foster the plan only if the original 0.38% rate is preserved, with 0.20% for the federal government, and the remainder shared among states and municipalities.

In addition to the distribution, they advocate the use of the revenue not just in social security, but also in health care and education.

“It's always embarrassing to defend a tax, especially in the situation we're experiecing, but we have no alternatives,” said Luiz Storvos, one of CNM's leaders.

Minister Ricardo Berzoini, head of the Government Secretariat, said the government may make changes to the bill and said he is counting on the cooperation of mayors to urge lawmakers to pass it.

“The vote depends on Congress, but we're counting on these negotiations so that we may have a swift process ensuring that these funds reach the budget of municipalities, states, and the federal government as quickly as possible.

According to Berzoini, the rise in the new CPMF tax from 0.20% to 0.38% should not pose an obstacle to the vote, as it is a threshold “possible to be assimilated by the economy,” and also because the levy is easy to collect and can be turned into direct investment with no major issues.

Political tension

The minister, which spearheads talks between the presidency and Congress, went on to mention the political tension between the government and the lower house speaker, Rio de Janeiro Deputy Eduardo Cunha (of the Brazilian Democratic Movement Party, or PMDB), made worse in the last few days after the president talked about his involvement in a corruption scheme.

Ricardo Berzoini, however, described the relationship between Cunha and the government as “republican and transparent” and said that it ensures institutional dialogue in negotiations for projects designed to benefit the nation.

“Respect in the institutional communications is crucial, along with our ability to talk to all caucuses in a transparent, realistic way, with no circumlocution of any sort,” he said.

Translated by Fabrício Ferreira

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