Reform on income and consumption does not aim to increase revenue

The Minister of Finance, Fernando Haddad, said this Thursday (20) that the tax reform on consumption, in progress in the Senate, and the reform on income tax, which will still be presented by the government to the National Congress, do not aim to increase revenue to help with the fiscal adjustment.

“The reform on income and consumption cannot have fiscal adjustment as its objective. The fiscal adjustment is being made based on other assumptions, which is the elimination of trinkets that affect the tax system as a whole, including the state. We are talking about (fiscal) waivers of around 6% of GDP (Gross Domestic Product)”, said Haddad, who participated in the presentation of 17 proposals for financial reforms in the country this morning in Rio de Janeiro.

According to the minister, tax waivers and exemptions that have been made are being reviewed “in light of the social impact, most of the time, low”.

Haddad informed that the portfolio is very cautious in relation to the income tax reform, which he classified as very complex. According to the minister, the reform on income will need a maturing process as it has been less discussed than the tax reform on consumption that is underway.

“The mother of all reforms is taxation, especially on consumption. It has a huge impact on productivity. Because today, unfortunately, the tax system is so disorganized that it rewards the least efficient, ”she said.

“If we don’t address these reforms and make the country grow, tensions will soon be intensified again. And all we need now is to move away from this environment of heightened tensions and return to the model of development in harmony between the powers so that we can envision a horizon for the country. I am an optimist,” added Haddad.