Source: DCI - São Paulo / SP - 18/06/2010

State Agency

SÃO PAULO - The Minister of Finance, Guido Mantega, admitted yesterday that Brazil has a high and inefficient tax burden, but said that the government preferred not to run the risk of approving a reform due to the proximity of the elections. "It is always difficult to pass reforms and we are faced with the proximity of the elections," he said. "We could have a monster and the amendment would be worse than the sonnet", evaluated the minister, who participated in the meeting of the Economic and Social Development Council (CDES), in Itamaraty. The minister said that the government has been exempting recently. In 2010, the government's projection is that this relief will add up to R $ 53,59 billion. "It wasn't everything we wanted to do, but it wasn't bad," he said.

He also said that, despite the increase in revenue, the tax burden has decreased not only for people but for companies. Mantega said he believes the next government will have an effective tax relief proposal that should be accompanied by tax reform.

The minister also spoke about the country's current account deficit and presented a positive outlook. According to him, starting in 2012, the world economy will recover after the effects of the international financial crisis and, with that, Brazil should return to export more.

Also according to the Minister of Finance, Brazilian investment should grow 20% this year in comparison with 2009. In particular, he cited the resources directed to the country's infrastructure. “Investment is growing at a high level”, he emphasized, stressing that the action of state-owned companies on this point has been fundamental when combined with actions by the private sector.

Despite this optimistic scenario for the evolution of investments, the minister commented that, in relation to GDP, the investment rate is still at a low level. "But we must reach satisfactory indicators," he said.

Mantega also countered criticisms that Brazil is placing more emphasis on foreign trade in primary products than manufactured products. "Today, what is giving more money to Brazil is iron ore and not the steel sector," he said.