Finance Minister advocates modernizing tax structure to drive business
Modernizing Brazil's tax structure is as important as the fiscal adjustment toward fostering economic recovery, Finance Minister Joaquim Levy said Tuesday (May 12). According to him, unifying the Tax on Sales and Services (ICMS), Brazil's value-added tax collected on a state-level, provides an incentive for the business environment.
“Undoubtedly, tax changes are powerful tools for expanding the economic activity, creating incentives that accumulate over time,” the minister told participants of the 27th National Forum held in Rio de Janeiro by the National Institute of Advanced Studies (INAE), which discussed new development strategies for Brazil. Because he had a scheduled meeting in London with business leaders and British authorities, the minister recorded his message for the forum on video.
Levy went on to advocate more diverse financing of the economy by developing private financial tools to expand resources available for investment in the country in a time of limited government subsidy for long-term financing. “This can only be achieved by expanding the role of capital markets. That's not an easy task, but its success is crucial to solve persistent problems with our economy,” he said.
The minister said the government's strategy to restore growth and revive the economy is not limited to fiscal adjustment. He stressed that the economic team aims to create an economic environment that restores confidence in the country and encourages investment. According to Levy, the strategy is generally based on a notion that “the government's primary role is to create a setting for the society and the private sector to play their roles.”
For the minister, achieving fiscal balance and readjusting government-managed prices such as energy and fuels are just the early stages in the path of economic recovery, while preserving social programs. “A fiscal adjustment that protects social programs and involves the private sector will pave the way for resuming growth on new foundations,” he added.
In his message, Levy went on to advocate a streamlining of government bureaucracy. “Long-standing flaws like patrimonialism are a setback to competition and will charge their price,” he said. “The government needs to address these flaws instead of trying to circumvent them through myriad adaptations and programs whose burden on the public coffers turns out to be unbearable.”
Translated by Mayra Borges
Fonte: Finance Minister advocates modernizing tax structure to drive business
