Brazil needs to cut spend­ing to boost ef­fi­ciency: min­is­ter

The Pak Banker - - 6BUSINESS -

BRASÍLIA: Brazil must re­duce public spend­ing to com­bat its eco­nomic chal­lenges and to be­come more ef­fi­cient, Fi­nance Min­is­ter Joaquim Levy said. "We can't stand still, wait­ing for the loss of in­vest­ment grade," Levy said at an event in Cam­pos do Jor­dao, Sao Paulo state. "We need to im­ple­ment a qual­ity shock to public spend­ing." Brazil, South Amer­ica's largest econ­omy, has ev­ery­thing it needs to con­tinue grow­ing and must im­ple­ment struc­tural changes, the min­is­ter said. Sim­pli­fy­ing tax­a­tion should be a pri­or­ity, he said. Rein­tro­duc­ing the so-called CPMF tax on fi­nan­cial trans­ac­tions "would be good if it were used as a source of rev­enue for the health area for a few years," Levy told re­porters at the event. Yet Pres­i­dent Dilma Rouss­eff de­cided in a meet­ing Satur­day af­ter­noon with Chief of Staff Aloizio Mercadante and Bud­get Min­is­ter Nel­son Bar­bosa to scrap plans to re­vive the tax, news­pa­per Folha de S.Paulo re­ported, with­out say­ing where it got the in­for­ma­tion.

Brazil is due to an­nounce its 2016 bud­get bill on Mon­day, which was sup­posed to in­clude es­ti­mated rev­enue from the planned rein­tro­duc­tion of CPMF and the Cide tax on ser­vices, two peo­ple with knowl­edge of the mat­ter said Aug. 27. Gov­ern­ment al­lies in Congress, in­clud­ing Se­nate Pres­i­dent Re­nan Cal­heiros, crit­i­cized plans for CPMF and said the gov­ern­ment needs to cut spend­ing be­fore it raises taxes.

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