Source: Sindicombustíveis-AL - Maceió / AL - 06/07/2010

Source: The Globe

At the end of the next decade, the Brazilian economy will be at the doors of the First World. This is the prognosis for reputable international institutions and even banks, which point to Brazil as the next country to become developed, before China, whose social indicators are still far removed from the average of the nations that have overcome underdevelopment.

It is clear that this possibility is based on the hypothesis of maintaining a reasonable pace of economic growth, considerable advances in infrastructure and a significant improvement in indicators that pull Brazil down in education, health, housing, basic sanitation, etc.

The achievement of these objectives will depend on the combination of several factors and the removal of obstacles, including some with relative urgency. This is the case of the inadeestava when the country's tax structure.

Recently, former minister Delfim Netto, making a parody with the expression “Belíndia” - coined by economist Edmar Bacha years ago to explain that Brazil simultaneously met conditions similar to those of Belgium and India -, said that the country was now more for “Engana”, with tax burden from England (in English, England) and services from Ghana. In fact, the Brazilian political class prefers to deceive itself on this issue, or to pretend that it does not see the risk that the excessive tax burden, in the range of 36% of GDP, will kill the goose that lays golden eggs.

A few weeks ago, President Lula himself linked the high tax burden to the need to finance public spending that would enable social inclusion.

This mistaken view, which is strongly supported by the political class, has led Brazil to sustain deficient state companies and colossal waste in the public sector for decades.

But it is a situation that the country cannot live with indefinitely. The aberrations are many, some are even striking. In telecommunications services, the weight of taxes corresponds to 43%. Interestingly, the government announces a plan to enable low-income population access to high-speed internet (called broadband) without considering any reduction in the tax burden. On the contrary, as the idea is to resurrect a ghostly state-owned company, as it was already in the process of extinction, more public resources will have to be used to make this daydream feasible.

Telecommunications services serve as an example of the inadequate tax structure, as well as the prices of LPG (cooking gas) and fares for buses, trains, subways, electricity, water and sewage, which are burdened by the weight of taxes, although they are included in basic consumption. the majority of the population. As the Union holds the largest share of tax revenue, it has been easier for the Ministry of Finance to adjust federal taxes and contributions. The states, in turn, have less financial strength and stick to the high ICMS rates, even admitting that this narrows the taxpayer base.

A reassessment of the country's tax structure, even based on the failed attempts at reform in recent years, should be on the agenda of the electoral campaign.