Haddad: Increased productivity requires a change in the tax system

Finance Minister Fernando Haddad again criticized, this Thursday (25), the current Brazilian tax system and assessed that the country is already mature enough to approve the tax reform in Congress. According to the minister, who spoke at an event at the Federation of Industries of the State of São Paulo (Fiesp), Brazil cannot increase its productivity with the current tax system.

“There is no way to increase productivity in Brazil with this tax system. Congress is absolutely mature and society is anxious to see before it something that provides legal security for investors, and today I would say that just as important as that, legal security for the tax base of the State”, said Haddad.

According to the minister, the tax reform could solve most of the problems of the current tax collection system, which has become, according to him, anachronistic and “monstrous”.

“We are addressing a tax reform that is even more modern, because it introduces a Value Added Tax into the national tax system that practically solves a good part of the vices of the current system that, in my opinion, is the great villain for the low growth rates of the our productivity.”

“The thing has become so monstrous that even the national State does not know how much it can collect. Every moment there is a judicial decision that undermines the State’s tax base and leaves us in a permanent state of insecurity,” he added.

For the minister, the tax reform will bring stable rules, which will allow the State to know how much it can invest and spend. “And that businessmen can plan for the medium and long term. Investments today require a planning and predictability period that the current tax system cannot offer.”

Education

The Minister of Finance celebrated the approval of the fiscal framework by the Chamber of Deputies. The project of the new fiscal regime had the plenary vote completed this Wednesday (24) and will now be submitted to the analysis of the Senate. According to Haddad, the milestone guarantees the replacement of 100% of the education budget and opens up the possibility of other investments in the development of the country.

“If we have the resources to make the investments happen, especially the PPPs (public-private partnerships), which will now all be backed by the National Treasury, if we have the resources to re-educate our people, if we do this tidying up of home, at the time of the ecological transition, which we are putting together in the federal government, stimulating industrialization from a perspective of the future that looks at the fiscal, the environmental, and the social, I have no doubt that we will verify that Brazil will grow again.”