The change can establish parameter values in the complementary law, but with the possibility of changing through the ordinary law for the next government
The new fiscal framework, which will replace the spending ceiling, could still undergo some changes before being sent to the National Congress, scheduled for Tuesday 19.
Second Stadiumthe definitive version of the fiscal framework can establish the values of the parameters in the complementary law for the next 4 years, but leaving the possibility of modification with ordinary law to the next government.
Initially, the proposal was to include the tax framework concepts in the complementary law and the parameter values in the ordinary law. However, if confirmed, the change could make it more difficult to change the parameters, since the complementary law requires a more qualified quorum than an ordinary law.
Passing a supplementary law requires an absolute majority of the members of each chamber, while an ordinary law only requires a simple majority.
What are the parameters?
Among the main parameters that must be included in the text of the fiscal framework is the percentage of 70% of the change in revenues, which will serve as a reference for the growth of expenses from one year to the next.
In addition, a range between 0.6% (minimum) and 2.5% (maximum) must also be established to allow federal budget expenditures to grow above inflation. Therefore, it is determined that expenses will have a minimum increase of 0.6% above inflation and a maximum of 2.5%.
What is a tax framework?
The fiscal framework consists of a set of rules that aim to control public finances, preventing the government from spending more than it collects. The term arcabouço, which means “skeleton” or “foundation”, refers to the rules that will guide Brazilian fiscal policy.
The new rules replace the old spending ceiling, in place by the Temer government, and its main objective is to prevent the growth of public debt by controlling spending. If public debt grows too much, the market becomes insecure and starts increasing interest rates for loans, for example, leading to price inflation.
The measure aims to increase the predictability of finances and, consequently, the confidence on the part of economic operators, so that interest rates fall. This is necessary, because an economy with high interest rates, over a long period, affects society as a whole, reducing investment returns and purchasing power, as well as increasing unemployment and recession.
Source: Terra
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