Source: Valor Econômico, 18/07/2007

Lula: “It is full of businessman with a bench because the
law allows. We need to have the courage to discuss public funding,
because is cheaper"

The members of the Economic Development Council
and Social demanded yesterday from President Lula, during a meeting at the Palácio do
Planalto, the creation of a constitutional rule that limits the tax burden
considered excessive by the board members. The parameter would be the level
of taxation adopted by other developing countries - approximately
27%, according to consultant Antonino Marmo Trevisan. Preliminary estimate of
Ministry of Finance indicates that the tax burden has increased again, having
reached in 2006 34,5% of the Gross Domestic Product (GDP), already considered the new
methodology for calculating GDP by IBGE.

Rapporteur of the Working Group on Tax Reform in the Council, Trevisan
suggested that, whenever the tax burden goes beyond the limit, a mechanism of
linear rate reduction is applied in the following year, to adjust the
surplus. “The current tax burden reduces competitiveness and encourages
evasion ”, he justified.

The Minister of Finance, Guido Mantega, also defended a gradual reduction of
tax burden, but it is against the imposition of a constitutional limit. Per
that, he said, the rule defended by businessmen will not be part of the proposal
tax reform to be sent by the government to Congress.

The counselors also demanded a progressive reduction in the Contribution
Provisional Statement on Financial Transactions (CPMF) until it becomes
with “symbolic rate, for fiscal control”. For Trevisan, there is no
reasons for the government to fear revenue losses if it meets all points of the
tax reform. “The IRS has been setting successive records for
collection. There is no way to say that a tax reform will 'punish'
government treasury ”, he provoked.

President Lula, for his part, assured that “tax reform will
leave ”, but he argued that other reforms also need to leave the paper, such as the
political and labor. “We have no reason to be afraid to discuss anything
be it reform, ”demanded the president.

On political reform, Lula stated that it is essential for the country and
that, “without it, the others always get more difficult”. He recognized the difficulty
for the current Congress to approve the policy, “due to the need to
survival of those who are legislating in their own cause ”.

The president pointed out some distortions in the system, such as financing
campaigns. “It is full of businessmen with a deputy bench,
senators, councilors, because the legislation allows. We need to have the courage to
discuss public funding, because it is cheaper, easier to control
and then the elected citizen owes nothing to anyone. ”

The president expressed concern about the various investment demands
contained in the inevitable debates on tax reform. "We need
improve health, improve education, relieve this, relieve that, send
a lot of public servants though, because they need to wipe the state and lower the
taxes. My fear is that the account doesn't always close, ”said the president. "I
I think we are moving forward. We have built a climate that is possible, if not
the perfect makeover, make the one that is more, I would say, suitable for the moment ”,
he added.

Regarding labor reform, Lula recalled that there are more workers
informality than formality and that, therefore, it is necessary to promote
changes. “But if it continues as it is, on the one hand a group of
entrepreneurs thinking that it is necessary to tear up the CLT and do it all over again,
union leaders thinking that they have to maintain the CLT and put more
things, there's no deal. ”

The Council meeting has not yet addressed biofuels. Lula said that
intends to “give national sovereignty status to the issue”. And compared the current
moment with the rubber cycle in the Amazon, which generated a lot of wealth, but ended up
quickly. “As I didn't have a strategic nation project, it was just a
momentary thing for those who want to earn money very quickly, the
rubber left and Brazil lost importance, lost hegemony and we were
without taking advantage of that extraordinary moment. Biofuels are another
thing, ”he added.