Study: Union pulls record tax burden


By Luciana Rodrigues, O Globo - 02/02/2005

RIO and BRASÍLIA. The Brazilian tax burden increased again in 2004, reaching a record of 36,76% of the Gross Domestic Product (GDP, sum of all the wealth generated by the country over a year), and its increase was mainly the result of taxes and federal government contributions. These are the main conclusions of a study by economists José Roberto Afonso, Amir Khair and Erika Amorim Araujo. According to its estimates, the Union was responsible for 70% of the increase in the tax burden between 2003, when it was 35,23% of GDP, and 2004.

Cofins alone accounted for a 45% increase in the weight of taxes in the economy. At the end of 2003, did the government change the rules for charging Cofins? have rates increased for some sectors, but are no longer cumulative? and, at the time, he guaranteed that there would be no impact on the collection.

Economist José Roberto Afonso, a former superintendent of Tax Affairs at the BNDES and today a technical consultant to the PSDB's leadership in the Chamber, points out that the Union has raised taxes that are not shared with states and municipalities. In practice, the federal government did not share the fruits of this tax increase.

Share of states and municipalities falls in revenues

In his study, Afonso also analyzed the tax revenues of each sphere of government. In other words, how much each one has resources after the collection and constitutional transfers. In 2003, the Federal Government took 58,1% of tax revenues, a slice that grew to 58,9% last year. Meanwhile, the states saw their share in the revenue pie drop from 25,1% to 24,6% and, in the municipalities, the reduction went from 16,8% to 16,5%.

? Federal participation was very high. Is everything that was done in the last fiscal reform, in the 1988 Constitution, reversing itself? says Afonso.

The study also shows that, last year, the tax burden of 36,76% of GDP was the highest since 1947. Collection amounted to R $ 650 billion, an increase of R $ 99,8 billion, without discounting inflation, in relation to 2003. Afonso compares these figures with the expansion of the Brazilian GDP: in 2004, the country generated R $ 206,8 billion more wealth, in nominal terms, than in 2003. But almost half of that? the R $ 99,8 billion increase in revenue? ended up in the hands of the government.

? The economy performed spectacularly in 2004, with the biggest growth in the last ten years. But was half the increase in national income appropriated by the government machine? says the economist.

He points out that, often, higher taxation leads entrepreneurs to readjust their prices. In order to contain inflation, the Central Bank, in turn, raises interest rates, which increases the cost of public debt and forces the government to raise tax collection even further.

? Is the dog biting its own tail? resume.

Revenue says it only calculates cargo after GDP result

Afonso suggests emergency measures to relieve investments, such as the creation of tax credits for the purchase of machinery and equipment and for civil construction.

Consulted about the study, the IRS reported that it only calculates the annual tax burden after the disclosure of GDP by IBGE. Preliminary results of the GDP value will be presented on March 31. Afonso, for his part, explains that he used GDP estimates made by the National Treasury Secretariat in his methodology? subordinated to the Ministry of Finance, as is the Revenue? in your December tax accounts report.